HCL Infosystems Ltd

Your Board of Directors are pleased to present the Thirty Eighth (38^th) Annual Report on the Business and Operations of the Company, together with the audited Financial Statements, both standalone and consolidated, for the financial year ended March 31, 2024.

The summary of the financial performance of the Company for the Financial Year ended March 31, 2024, as compared to the previous year is as below:

(Rs.Lakhs)

The consolidated net revenue and other income of the Company for the financial year ended March 31,2024, was Rs.6,199.29 lakhs as against Rs.5,479.87 lakhs during the previous financial year ended March 31, 2023. The consolidated loss before tax for the financial year ended, March 31, 2024, was Rs.1,581.60 lakhs as against loss of Rs.3,874.41 lakhs during the previous financial year ended March 31, 2023.

The net revenue and other income on standalone basis for the financial year ended, March 31, 2024, was Rs.1,783.89 lakhs as against Rs.1,974.51 lakhs during the previous financial year ended March 31, 2023. The loss before tax for the financial year ended, March 31,2024, was Rs.1,554.88 lakhs as against loss of Rs.3,837.10 lakhs during the previous financial year ended March 31, 2023.

Your Board of Directors do not recommend any dividend for the financial year 2023-24.

A detailed analysis and insight into the financial performance and operations of your Company for the year ended March 31, 2024, is provided in the Management Discussion and Analysis, forming part of the Annual Report.

As on March 31, 2024, the authorized share capital of the Company stands at Rs.1,756,000,000 (One Hundred Seventy- Five Crores Sixty Lakhs Only) divided into (i) 853, 000, 000 (Eighty-Five Crores and Thirty Lakhs) equity shares having

a face value of Rs.2/- each and (ii) 500,000 (Five Lakhs) Preference Shares having a face value of Rs.100 each.

As on March 31, 2024, the issued and subscribed share capital stands at Rs.658,421,856 (Indian Rupees Sixty-Five Crores Eighty-Four Lakhs Twenty-One Thousand Eight Hundred and Fifty-Six only) divided into 329,210,928 (Thirty- Two Crores Ninety-Two Lakhs Ten Thousand Nine Hundred and Twenty-Eight) equity shares of face value of Rs.2 each.

As on March 31, 2024, paid up equity share capital stands at Rs.658,419,856 (Indian Rupees Sixty-Five Crores Eighty- Four Lakhs Nineteen Thousand Eight Hundred and Fifty- Six only) divided into 329,209,928 (Thirty-Two Crores Ninety-Two Lakhs Nine Thousand Nine Hundred and Twenty-Eight) equity shares of face value of Rs.2 each.

In view of losses, no amount is proposed to be transferred to the general reserve of the Company.

The Company has following credit ratings:

# Based on the credit enhancement in the form of provisional unconditional and irrevocable corporate guarantee to be provided by HCL Corporation Private

Limited, the promoter company.

Your Company has not accepted/renewed any deposits from the public during the year and there were no deposits outstanding either at the beginning or at the end of the year.

The Equity Shares of your Company are listed at BSE Limited, Mumbai (BSE) and National Stock Exchange of India Limited, Mumbai (NSE).

The Company has paid the listing fee for the year 20242025 to BSE and NSE.

Mr. Raghu Venkat Chivukula and Mr. Kirti Kumar Dawar have been appointed as Additional Directors, (Non-Executive & Independent category) not liable to retire by rotation, on the Board of the Company for first term of five consecutive years from 10^th August 2023 till 9^th August 2028. The appointment was also approved by the shareholders of the Company. The Board is of the opinion that the Independent Directors inducted during the year uphold the highest standards of integrity and possess the requisite expertise and experience required to fulfill their duties as Independent Directors.

Mr. Kaushik Dutta and Ms. Sangeeta Talwar, Non- Executive Independent Directors of the Company, retired, after completion of their second term as Independent Directors of the Company w.e.f. closing hours of 31^st March 2024.

Dr. Nikhil Sinha has been re-appointed as a Non- Executive Independent Director of the Company for the second term w.e.f. 1^st April, 2024 to 31^st March, 2029. This has been approved by the shareholders of the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Pawan Kumar Danwar, retires from office by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. A brief resume, details of expertise and other directorships/committee memberships held by him, form part of the Notice convening the Thirty Eighth Annual General Meeting.

In terms of the provision of Section 149, 152(6) and other applicable provisions of the Companies Act, 2013, an Independent Director shall hold office up to a term of five consecutive years on the Board of the Company and shall not be liable to retire by rotation.

Currently, the Board has 4 (Four) Committees: Accounts and Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, and Finance Committee. A detailed note on Committees is provided in the Corporate Governance Report and forms part of the Annual Report.

The composition of the Accounts and Audit Committee is given below:

*Mr. Kaushik Dutta and Ms. Sangeeta Talwar, after completion of their second term, retired w.e.f. from closing hour of 31^st March, 2024.

**Dr. Nikhil Sinha was designated as Chairperson of Accounts and Audit Committee w.e.f. 1^st April, 2024.

Mr. Raghu Venkat Chivukula, Mr. Kirti Kumar Dawar and Mr. Pawan Kumar Danwar were appointed as members of the Accounts and Audit Committee w.e.f. 1^st April 2024.

The Board had accepted all the recommendations of the Accounts and Audit Committee during the financial year 2023-24.

Pursuant to the provisions of Section 178 and 134 read with Schedule IV of the Companies Act, 2013 and Regulation 17(10) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors conducted a formal annual evaluation of its own performance, the Committees of the Board, and each individual Director.

The Company had appointed an external agency to conduct the evaluation of the Board, Committees and individual Directors including Independent Directors, as per the assessment criteria and norms designed by the Company's Human Resource Department and approved by the Board's Nomination and Remuneration Committee. The evaluation reports were reviewed by an Independent HR consultant, who shared the results with the Board Chairman - Dr. Nikhil Sinha.

Independent Directors in their separate meeting held on

13^th February 2024 reviewed the performance of No Independent Directors and the Board as a whole. They also reviewed the performance of the Chairperson of the Company.

The Company believes that a diverse Board will be able to leverage different skills, qualifications, and professional experiences which is necessary for achieving sustainable and balanced development. In accordance with the provisions of Section 178 of the Companies Act, 2013 and Part D of Schedule II of the Listing Regulations, the Company has adopted the policy on Nomination and Remuneration of Directors (Executive, Non-Executive and Independent), Key Managerial Personnel (KMPs), Senior Management and other Employees of your Company. The policy specifies the criteria for appointment of Directors and Senior Management and their remuneration and for determining qualifications, positive attributes and independence of a director.

The policy is available on the website of the Company and can be assessed at

During the financial year 2023-24, 4 (Four) Board Meetings were held and the gap between two meetings did not exceed one hundred and twenty days. The details of Board Meetings held are stated in the Corporate Governance Report which forms part of the Annual Report.

The Company no longer meets any of the criteria required for composition of CSR Committee i.e. net worth criteria, turnover criteria, or net profit criteria, hence, CSR Committee was dissolved during the year.

The Company is committed to adhere to best corporate governance practices. The separate sections on Management Discussion and Analysis, Corporate Governance, and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI Listing Regulations, 2015 form part of this Annual Report.

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, and based on the representations received from the operating management, the Directors hereby confirm that:

(a) in the preparation of the annual accounts for the financial year ended 31^st March 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on the financial year ended 31^st March 2024 and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

All Independent Directors have given declarations to the effect that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI Listing Regulations, 2015.

The information required under Section 197 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 the remuneration of each director to the median remuneration of the employees of the Company for the financial year and the key parameters for any variable component of remuneration availed by the directors: NA*

* No remuneration has been paid to any director during the year

*Includes variable & incentives

Note: Increase in remuneration was not comparable due to payment of one-time incentive in 2022-23, hence not stated.

There was an increase of 1% in the median remuneration of the employees in the financial year 2023-24.

The number of permanent employees on the rolls of the Company and its subsidiaries at the end of the financial year was 147.

The average percentage increase in the salaries of employees in the FY 2023-24 was 8%.

The annual increase in salary of manager is not comparable due to payment of one-time incentive in 2022-23.

The Company affirms remuneration is as per the remuneration policy of the Company.

The Annual Report is being sent to the members of the Company and others entitled thereto, excluding the information under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended. Any member interested in obtaining the said information may write to the Company Secretary at the registered office of the Company.

The Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 and relevant rules thereunder are given in the notes to the Financial Statements.

During the financial year 2023-2024, all the related party transactions entered into by the Company were in the ordinary course of business and at arm's length basis. The Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Company has employed an external firm of Chartered Accountants to

review and evaluate the basis of such agreements and opine on their fairness.

The Company has formulated a Policy on dealing with related party transactions which is also available on the website of the Company at the following web link:

The details of the related party transactions as required under the Act and the Rules are attached in Form AOC-2 as Annexure 1.

The Company has put in place controls commensurate with the size and nature of its operations. These have been designed to provide reasonable assurance with regards to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance with corporate policies.

The company has an internal audit function designed to review the adequacy of internal control checks in the system which, covers all significant areas of the Company's Operations such as Accounting and Finance, Procurement, Business Operations, Statutory compliances, IT Processes, Safeguarding of Assets and their protection against unauthorized use, among others. The internal audit function performs Concurrent Audits on high value transactions. The Internal Audit function also performs the internal audit of the Company's activities based on the Internal audit plan, using external and independent audit agencies, which is reviewed each year and approved by the Board Audit Committee. The Audit Committee reviews the reports submitted by internal auditors. Suggestions for improvements are considered and the Audit Committee follows up on corrective action. Disciplinary action is taken, wherever required, for non-compliance with corporate policies and controls.

The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation of such controls was observed during the year.

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has established a Vigil Mechanism/ Whistle Blower Policy for Directors and employee to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. No person has been denied access to the Chairman of the Audit Committee.

The said Policy is posted on the website of the Company and can be assessed at

https://www.hclinfosvstems.in/wp-content/uploads/2016/09/Whistleblower Policy new.pdf Risk Management Policy

The Board of the Company has adopted a risk management policy for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis, including aligning the internal audit functions to areas of key risks.

The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this annual report as a separate section.

As per Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company in its 36^th Annual General Meeting held on 21^st September 2022 approved the reappointment of M/s BSR & Associates LLP, Chartered Accountants (FRN - 116231W/ W-100024), as the Statutory Auditors of the Company for second term of 5 years i.e. from the conclusion of 36^th Annual General Meeting till the conclusion of 41^st Annual General Meeting of the Company.

The Report given by M/s BSR & Associates LLP, Chartered Accountants, on the financial statements of the Company for the financial year 2023-24 is part of the Annual Report. There was no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Auditors did not report any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) of the Act.

The secretarial audit as per Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 was carried out by M/s. V K C & Associates, Practicing Company Secretaries for the financial year 2023-24. The Report given by the Secretarial Auditor of the Company and its material subsidiary HCL Infotech Limited forms an integral part of this Board's Report. There was no qualification, reservation or adverse remark or disclaimer in their Report.

During the year under review, the Secretarial Auditors did not report any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) of the Act. In terms of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Accounts & Audit Committee recommended, and the Board of Directors appointed M/s. V K C & Associates, Practicing Company Secretaries as the Secretarial Auditors of the Company in relation to the financial year 2024-25. The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder.

A certificate has been received from M/s. V K C & Associates, Practicing Company Secretaries, Company Secretaries in practice that none of the Directors on the Board of the Company had been debarred or disqualified from being appointed or continuing as Directors of companies by SEBI, Ministry of Corporate Affairs or any such other Statutory/ Regulatory authority.

In terms of the provisions of the SEBI Listing Regulations, your Company has a policy for determining 'Material Subsidiary' and the said policy is available on the Company's website at

The Company is in compliance with the applicable Secretarial Standards as issued and amended by the Institute of Company Secretaries of India (ICSI), from time to time.

(i) the steps taken or impact on conservation of energy; Although the operations of the Company are not energy-intensive, the management has been highly conscious of the criticality of conservation of energy at all the operational levels and efforts are being made in this direction on a continuous basis. Adequate measures have been taken to reduce energy consumption, whenever possible, by using energy efficient equipment.

(ii) the steps taken by the company for utilizing alternate sources of energy; NA

(iii) the capital investment on energy conservation equipment's; NA

(i) the efforts made towards technology absorption- Nil

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution- Nil

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- Nil

(a) the details of technology imported- NA

(b) the year of import; - NA

(c) whether the technology been fully absorbed- NA

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof- NA

C) The expenditure incurred on Research and Development: NIL

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflow:

In accordance with the Companies Act, 2013 ('the Act') and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Subsidiaries/Associates/JVs and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

During the year under review there is no change in the Joint Ventures and Associate Companies of the Company.

Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Subsidiaries Companies and Joint Venture in Form AOC-1 forms part of this annual report.

Pursuant to the provisions of Section 134(3)(a) r/w/ Section 92(3) of the Act, the Annual Return is put up on the Company's website and can be accessed at

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been duly constituted to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Financial year 2023-24, no complaints was received by the Company related to sexual harassment.

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the Rules'), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more have also been transferred to the demat account created by the IEPF Authority.

There were no unclaimed and unpaid dividends amount / the corresponding shares which were due to be transferred to IEPF/ IEPF suspense account during the FY 2023-24.

The Code of Conduct to Regulate, Monitor and Report by Designated Persons and Immediate Relatives is in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended ('the PIT Regulations'). The said Code lays down guidelines for Designated Persons on the procedures to be followed and disclosures to be made in dealing with the securities of the Company and cautions them on consequences of non-compliances.

The Code of Practices and Procedures of Fair Disclosures of Unpublished Price Sensitive Information including a Policy for determination of legitimate purposes is also in line with the PIT Regulations. Further, the Company has put in place an adequate and effective system of internal controls including maintenance of structured digital database, standard processes to ensure compliance with the requirements of the PIT Regulations to prevent insider trading.

The Board of Directors of the Company state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

4. There was no significant or material order passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

5. Details of the Employees Stock Option Scheme Section as required under Section 62(1 )(b) of the Act read with rule 12(9) of Companies (Share capital and debentures) Rules,2014.

6. There is no change in the nature of the business of the Company.

7. There are no material changes or commitments, if any, affecting the financial position of the Company which have occured between the end of financial year of the Company to which the financial statement relate and date of the report.

8. The company is not required to maintain cost records as per sub section (1) of Section 148 of the Companies Act, 2013.

9. No application was made or pending against the Company under Insolvency and Bankruptcy Code, 2016 (IBC).

10. There has been no case of one-time settlement with Bank or Financial Institution during the year as per rule Companies (Accounts) Rules, 2014 hence no requirement to provide the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

The Directors place on record their appreciation for the continued co-operation extended by all stakeholders including various departments of the Central and State Government, Shareholders, Investors, Bankers, Financial Institutions, Customers, Dealers and Suppliers.

The Board also places on record its gratitude and appreciation for the committed services of the executives and employees of the Company.