Second Tier: Governance by the Board
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Composition:

The Company has a balanced mix of Executive and Non-Executive Directors. As at closing of March 31, 2013, the Board had 10 Members consisting of six Non-Executive Members and four Executive Members (and also had one Alternate Director). Of the six Non-Executive Directors, five are Independent Directors and one is Non-Executive Director. The Chairman of the Board for the financial year 2012-13 was Mr. Subroto Bagchi.

Details of number of Directorships and Committee Memberships held by Directors in companies other than Mindtree as defined in Clause 49 of the Listing Agreement as on March 31, 2013.

directorships and committee memberships

* Appointed as an Executive Director w.e.f. October 24, 2012.

** Appointed as an Alternate Director to Mr. S. Janakiraman, w.e.f. October 22, 2012.

Board Meetings

The calendar of Board meetings is decided in consultation with the Board and the schedule of such meetings is communicated to all Directors in advance, to enable them to schedule their effective participation during Board meetings. Your Board met four times in the financial year 2012 -13 on April 16, 2012, July 15, 2012, October 16, 2012 and January 18, 2013.

The attendance of Directors at the Board meetings and last AGM held on July 16, 2012:

board meeting attendance

Directors' Shareholding in the Company as on March 31, 2013:

name of directors

* Appointed w.e.f. May 2, 2012.

** Appointed as an Executive Director w.e.f. October 24, 2012.

*** Appointed as an Alternate Director to Mr. S. Janakiraman, w.e.f. October 22, 2012.

None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more than 5 Committees (as specified in Clause 49 of the Listing Agreement), across all companies in which he is a Director. The necessary disclosures regarding Committee compositions have been made by the Directors.

Directors retiring by rotation

Prof. David B. Yoffie, Prof. Pankaj Chandra and Mr. Ramesh Ramanathan will be retiring by rotation and being eligible, offer themselves for re-appointment in the ensuing fourteenth Annual General Meeting (AGM).

Mr. N.S. Parthasarathy has been appointed as an Alternate Director to Mr. S. Janakiraman, effective from October 22, 2012 and Mr. Anjan Lahiri had been appointed as the Executive Director effective from October 24, 2012.

Their brief resumes are attached to the notice of the AGM. The Board has recommended the same and seeks Shareholders' approval.

Disclosure of Related Party Transactions

During the year 2012-13, no materially significant related party transactions have been entered into by the Company with the Directors or Management or their relatives that may have a potential conflict with the interest of the Company. Details of all related party transactions are disclosed in the Notes to the Accounts of the annual report.

Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges or Securities and Exchange Board of India ('SEBI') or any statutory authority, on any matter related to capital markets, during the period from April 1, 2012 to March 31, 2013:

The Company has no non-compliance with any requirements prescribed by SEBI and other statutory authorities on said matters from the period April 1, 2012 to March 31, 2013.

Whistle Blower Policy

The Company has adopted a Whistle Blower Policy and has established the necessary mechanism in line with Clause 49 of the Listing Agreement with the Stock Exchanges, for employees to report concerns about unethical behavior. No person has been denied access to the Audit Committee.

Compliance with mandatory and non-mandatory requirements under Clause 49 of the Listing Agreement

The Company has disclosed all the mandatory requirements under Clause 49 of the Listing Agreement.

Among the non-mandatory requirements of Clause 49 of the Listing Agreement, the Company has set up a Compensation Committee and has a Whistle Blower Policy in place.

Board disclosures — Risk management

The Company has laid down systems to inform Board Members about the risk assessment and minimization procedures. The risks and Company's mitigation strategies are more fully described in the risk management section and these procedures are periodically reviewed by the Board to ensure effective controls.

Information provided to the Board

  • Annual operating plans and budgets including capital budgets and any updates thereof;
  • Quarterly results for the Company and its business segments;
  • Minutes of Meetings of Audit Committee and other Committees of the Board;
  • The information on recruitment and remuneration of senior officers just below the Board level, including appointment or removal of Chief Financial Officer and the Company Secretary;
  • Show cause, demand, prosecution notices and penalty notices which are materially important;
  • Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems;
  • Any material default in financial obligations to and by the Company or substantial non-payment for services rendered by the Company;
  • Any issue, which involves possible public or product liability claims of substantial nature, including any judgment or order which may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company;
  • Details of any joint venture or collaboration agreement and any acquisitions;
  • Transactions that involve substantial payment towards goodwill, brand equity or intellectual property;
  • Significant development on human resources front;
  • Sale of material nature of investments, subsidiaries and assets, which is not in normal course of business;
  • Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material; and
  • Non-compliance of any regulatory, statutory or listing requirements and Shareholders' services such as non-payment of dividend, delay in share transfer, etc.,

Remuneration Policy

The Company's Remuneration Policy is driven by the success and performance of the individual employee and the Company. Through its compensation programme, the Company endeavors to attract, retain, develop and motivate a high performance workforce. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance of the Company. The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and performance incentives, commission (variable component) to its Chairman, Managing Director and other Executive Directors. Annual increments are decided by the Compensation Committee within the salary scale approved by the Board Members and Shareholders.

Criteria for making payment to Non -Executive Directors

Section 309 of the Companies Act, 1956, provides that, a Director who is neither in the whole-time employment of the Company nor a Managing Director may be paid remuneration by way of commission, if the Company by special resolution authorizes such payment. Members of the Company at the 10th Annual General Meeting of the Company held on July 3, 2009, approved payment of remuneration by way of commission to Independent and Non-Executive Directors, a sum not exceeding 1% per annum of the net profits of the Company.

Period of Contract, Notice Period and Severance Pay of Directors

Chairman, Managing Director and the Executive Director

There is no specific period of contract of service for Chairman. The notice period in case of resignation is 6 months. The Managing Director and Executive Directors have been appointed for a period of five years.

Nominee Directors

One of our large investors have nominated their representatives to our Board.

Independent Directors and/or Non-Executive Directors

Period of contract and notice pay is not applicable to the Independent Directors. They are subject to retirement by rotation. There is no severance pay to any of the Independent Directors.

Stock Options to Independent Directors and/or Non-Executive Directors

The following table shows the details of stock options granted to Independent Directors and/or Non-Executive Directors outstanding as at March 31, 2013. The contractual life of each option is 4 years after the date of the grant.

independent directors stock options granted

All stock options vest equally over three year vesting term at the end of 1, 2 and 3 years respectively from the date of the grant and become fully exercisable at the time of vesting.

Details of shareholding by investors who have nominees on our Board as on March 31, 2013 are given below:

name of the shareholder

Secretarial Standards

The Institute of Company Secretaries of India (ICSI) has issued Secretarial Standards on various important facets of corporate functioning and management. Although these standards are recommendatory in nature, as a measure of good governance, the Company has voluntarily adopted and substantially complied with the ICSI Secretarial Standards on meetings of Board of Directors, general meetings, dividend, registers and returns, minutes, transmission of shares, passing of resolutions by circulation, affixing of common seal and Board's report.

Secretarial Audit

As a measure of good corporate governance and as recommended by the MCA Corporate Governance Voluntary Guidelines, 2009, your Company has voluntarily got a Secretarial Audit done for the financial year 2012-13. The Company has also appointed Shanker Prasad G, to conduct the Secretarial Audit of records and documents of the Company. The Secretarial Audit Report confirms that the Company is in compliance with all the applicable provisions of the Companies Act, 1956, Listing Agreements with the Stock Exchanges, Depositories Act, 1996 and all the guidelines and regulations of the SEBI. The 'Reconciliation of Share Capital Audit' was also undertaken on a quarterly basis and the audit covers the reconciliation of the total admitted capital with NSDL and CDSL and the total issued and listed capital.

The audit has confirmed that the aggregate of the total issued/paid up capital is in agreement with the total number of dematerialized shares held with NSDL and CDSL and the total number of shares in physical form.

Details of Remuneration to all Directors during the year 2012-2013

details of renumeration

* The total compensation paid to Mr. Anjan Lahiri consists of only Managerial Remuneration as an Executive Director for the period October 24, 2012 to March 31, 2013.

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