DIRECTORS’ REPORT DEAR SHAREHOLDERS, The Board of Directors ("Board") of Mindtree Limited ("Company" or "Mindtree") with immense pleasure present their Seventeenth report on the business and operations of your Company for the financial year 2015-16. This report is being presented along with the audited financial statements for the year Global Economic & Business Environment The details about Global Economic & Business Environment are provided under the section Management Discussion & Analysis of this Annual Report Financial Perspective (Standalone) of the year gone by Revenue for the year is Rs. 43,565 million signifying a growth of 22.8% in Rupee terms. Your Company had 220 active customers as on March 31, 2016 of which 80 accounts had revenues in excess of US$ 1 million, 29 accounts had revenues in excess of US$ 5 million, 15 accounts had revenues in excess of US$ 10 million, 6 accounts had revenues in excess of US$ 25 million, and 2 accounts had revenues in excess of US$ 50 million. EBITDA margins have marginally dropped from 19.9% in the previous year to 18.6% in the current year. Our effective tax rate is about 21.8% as compared to about 22.3% in the previous year. PAT has increased by 13.2% to Rs. 6,049 million as compared to Rs. 5,343 million in the previous year. Dividend Based on the Company’s strong and consistent financial performance and considering the profitability and the cash flow of the Company, the Board had declared interim dividends during the financial year 2015-16. The details of interim dividends declared are as below The dividend will be paid in compliance with all the applicable regulations. The dividend pay-out amount for the current year inclusive of tax on dividend will be Rs. 2,087 million as compared to Rs. 1,715 million in the previous year. In view of the improved predictability and stability of the Company’s operations, the Board intends to maintain similar or better levels of dividend payout over the next few years. However, the actual dividend payout in each year will be subject to the investment requirements of the annual operating plan for the year and any other strategic priorities identified by the Company. Changes to Equity Share Capital Your Company allotted 160,716 equity shares of Rs. 10/- each, to various Mindtree Minds and to Directors on exercise of stock options under various stock option plans/ Mindtree Employee Restricted Stock Purchase Scheme (ESPS) during 2015-16. In addition, the members are aware that the Company had issued and allotted 83,893,088 equity shares of Rs. 10/- each as Bonus Shares. Consequently, the paid-up equity share capital has increased from Rs. 837,323,720 as on March 31, 2015 to Rs. 1,677,861,760 as on March 31, 2016. Infrastructure In the beginning of the year, your Company had 19,21,869 sq. ft. of space consisting of 14,860 seats spread across various locations in India apart from Mindtree Kalinga – Training and residential facility for 500 campus minds. Following are the key changes made during the year. Bengaluru-Mysore Road: Your Company added 110,000 sq. ft. consisting of 1,248 seats. Bengaluru-Whitefield: Your Company carried out interiors for about 100,000 sq. ft. own facility consisting of 974 seats. This facility also will have LEED Platinum certification. Chennai: Your Company added 46,500 sq. ft. consisting of 454 seats. Bhubaneswar: Your Company added about 292 seats in the existing facility. Currently, expansion of existing facility by about 30,000 sq. ft. is in progress. This is likely to be ready for occupation by June 2016. In addition, your company will take up construction of Software Development Block Building measuring about 180,000 sq. ft. shortly. This is likely to be ready for occupation in 2 years’ time. In all, your Company has sufficient capacity to meet its growth needs over short and medium terms. Your Company has prioritized adopting Sustainable best practices in accordance with LEED green building design for creating & maintaining workplace infrastructure projects People Making Mindtree a Great Place to Work The futuristic form of growth is collaborative growth and this can happen only when we put all our hands on the deck and give shape to the way we want to be. At Mindtree we strongly believe that Mindtree Minds should have a lot of say in how they should be engaged. With about 82.54% of Millennials at Mindtree we wouldn’t have it in any other way! Mindtree aspires to become a Great Place to Work where Mindtree Minds trust who they work for, take pride in what they do and enjoy the company of the people they work with. We strongly believe that engaged Mindtree Minds are critical in achieving our business goals and building a sustainable organization. In our pursuit to transform Mindtree into a Great Place to Work, we are reinforcing our culture of partnering with Mindtree Minds in creating a congenial work environment. In continuation to MiVoice, Mindtree’s people experience survey done in collaboration with (Great Place to Work) GPTW, a set of dedicated leaders are anchoring initiatives on the four identified themes (Care for a fellow Mindtree Mind, Bottom-Up Communication, Career Growth & Learning and Visibility and Recognition) from the MiVoice Survey. This year 67.5% of Mindtree Minds have participated in the MiVoice survey to communicate their feedback, thoughts and ideas. An online platform called ‘i belong’ is created for Mindtree Minds to volunteer with the MiVoice Action teams. This attempt is to create an opportunity for Mindtree Minds to come forth and be part of the change. We, at Mindtree believe that Mindtree Minds don’t just work, but belong! We believe in investing today to realize our aspirations for Mindtree’s future. Hence we have ensured to list transforming Mindtree into a Great Place to Work among our 5 point strategy for 2015-16. Each Mindtree Mind is dedicatedly contributing towards making this happen. Our tag line says it all – Welcome to possible. It is definitely more than a slogan and attempts to reflect our approach to every engagement we explore with Mindtree Minds, the extended family of Mindtree, our customers, and our external partners. Building Leadership Pipeline at all Levels Exploring and creating different avenues to nurture the leadership skills for our talent pool has been in the ethos of Mindtree since its inception. We have aligned a gamut of leadership programs to suit the different levels of learner groups. We have embarked upon key learning journeys to upskill 50 leaders at an enterprise level, 100 women leaders and 50 leaders at an emerging leadership level. We have invested to grow our women talent through our focused efforts from 28% to 35% by year 2018, to bring in parity at work in Mindtree. We are focused on identifying and building our leadership pipeline at all levels right from the senior to the young budding potential talent. At Mindtree, a leader at the organization level is one who is agile in learning, self-aware and exhibits strength in one of the four competence areas - Ninja, Coach, Thought Leader and Rainmaker. Learning Agility is a summation of the 4 agilities – mental, results, change and people. While nurturing internal talent is given careful attention, we also ensure to balance our talent pool by recruiting the right talent from the market. This enables to create a fertile ground to grow a good quotient of diverse talent. Performance Management – Dropping the Bell Curve As a new age organization, we have attempted to relook at our performance management system. As a next step of progression we have dropped the Bell Curve and let go of the force rating approach. This is a big step for Mindtree wherein the rating assigned will only reflect the individual’s performance and not how he or she did in comparison to others. After having used the Bell Curve for a decade, we have decided to drop the Bell Curve and instead adopt a "Performance" Curve. To nurture and encourage 16,000+ Mindtree Minds to exhibit their best performance, we use a system based on the power law distribution method, which is gaining ground globally. Also known as the "long-tail" method, the aim is to identify hyper-high performers, high performers, potential high performers and so on till it reaches the tail end, or low performers. Our attempts to build the leadership pipeline is aligned with identifying the High-potential using individual performance focused approach. Headcount The total number of Mindtree Minds as on March 31, 2016 was 16,623 (including subsidiaries) as against 14,202 as on March 31, 2015. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 Mindtree as an organization is committed to provide a healthy environment to all Mindtree Minds and thus does not tolerate any discrimination and/ or harassment in any form. The Company has in place a Prevention of Sexual Harassment (POSH) policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Frequent communication of this policy is done in assimilation programs and at regular intervals to Mindtree Minds. Following are some of the awareness programs imparted to train Mindtree Minds and Internal Complaints Committee (ICC). 1. Every Mindtree Mind is supposed to undergo mandatory e-learning module on "Prevention of Sexual Harassment" at workplace. 2. The Internal Complaints Committee is trained by external agency when the committee members are on-boarded to the committee. 3. Policy of "Prevention of Sexual Harassment" at workplace is available on intranet for Mindtree Minds to access as and when required. Mindtree has setup an Internal Complaints Committee (ICC) both at the head office/ corporate office and at every location where it operates in India. ICC has equal representation of men and women and is chaired by senior lady mind and has an external women representation. ICC investigates the case and provides its recommendations to the apex authority. The apex authority upon receiving the recommendations from ICC arrives at the conclusion and acts upon such recommendations. Penal consequences of Sexual Harassment ("SH") and the constitution of the ICC is displayed at conspicuous places. The posters are also displayed in regional languages at all Mindtree offices. The following is the summary of the complaints received and disposed off during the financial year 2015-16: In India a) No. of SH complaints received: 10 b) No. of SH complaints disposed off: 10 Rest of the World a) No. of SH complaints received: 2 b) No. of SH complaints disposed off: 2 Board Meetings, Board of Directors, Key Managerial Personnel (KMP) & Committees of Directors Board Meetings The Board of Directors of the Company met six times during the financial year 2015-16. The details of various Board Meetings are provided in the Corporate Governance Report. The gap intervening between two meetings of the board is as prescribed in the Companies Act, 2013 (hereinafter "the Act"), Listing Agreement and SEBI (Listing obligation and Disclosure Requirement) Regulations, 2015 (hereinafter "LODR Regulations"). Appointment of Directors and KMP The following appointments were approved by the Shareholders at the Sixteenth Annual General Meeting: 1. Mr. Subroto Bagchi appointed as Executive Chairman to hold office till May 31, 2017. 2. Prof. Pankaj Chandra and Mr. Ramesh Ramanathan appointed as Independent Directors till March 31, 2018 by altering their terms of office. 3. Mr. Rostow Ravanan was re-appointed as Executive Director to hold office till May 19, 2020. Mr. Jagannathan Chakravarthi was appointed as CFO with effect from April 01, 2015. Ms. Vedavalli S was appointed as Company Secretary with effect from June 22, 2015. Note: Mr. Rostow Ravanan was appointed as CEO & Managing Director w.e.f April 01, 2016 till March 31, 2021. Mr. Krishnakumar Natarajan was appointed as Executive Chairman w.e.f April 01, 2016 till June 30, 2017. Reappointment of Director, retiring by rotation As per the Articles of Association of the Company, one third of the Directors are liable to retire by rotation at the Annual General Meeting of the Company, every year. Mr. V. G. Siddhartha retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting. Resignation, Cessations and Changes in Directors and Key Managerial Personnel There were no resignations/ cessations during the year. Note: Mr. Subroto Bagchi ceased to be Executive Chairman of the Company and continues as Non-Executive and Non-Independent Director with effect from April 01, 2016. Details of Remuneration to Directors The information relating to remuneration of Directors as required under section 197(12) of the Act, is given in Annexure 3. Board Committees The Company had the following Committees of the Board during the year 2015-16: 1. Audit Committee; 2. Nomination and Remuneration Committee; 3. Stakeholders’ Relationship Committee; 4. Administrative Committee; 5. Strategic Initiatives Committee (discontinued w.e.f July 16, 2015) 6. Corporate Social Responsibility Committee; and 7. Risk Management Committee The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance. The policy framed by the Nomination and Remuneration Committee under the provisions of section 178(3) & (4) of the Act, is as below: Policy relating to Directors a. The person to be chosen as a Director shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of Information Technology, sales/ marketing, finance, taxation, law, governance and general management. b. In case of appointment of Independent Directors, the Committee shall satisfy itself with regard to the independent nature of the Directors vis-à-vis the Company so as to enable the Board to discharge its function and duties effectively. c. The Nomination and Remuneration Committee shall consider the following attributes/ criteria, whilst recommending to the Board the candidature for appointment as Director: (i) Qualification, expertise and experience of the Directors in their respective fields; (ii) Personal, Professional or business standing; and (iii) Diversity of the Board. d. In case of re-appointment of Non-Executive and Independent Directors, the Board shall take into consideration the performance evaluation of the Director and his/ her engagement level. Declaration from Independent Directors The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Act, that they meet the criteria of independence as laid down in Section 149(6) of the Act. Board Evaluation Pursuant to the applicable provisions of Companies Act 2013, Listing Agreement and LODR Regulations, the Board has carried out an annual evaluation of performance of the Board including that of Independent Directors and functioning of various committees through a third party with experience in carrying out such evaluations. The findings were shared individually with the Board Members as well as the Chairman. The feedback from the review was that many of the processes followed by Mindtree met global best practice benchmarks as well as some areas where we need to further strengthen our processes. Your Company is in the process of strengthening the same. Remuneration Policy The Company’s remuneration policy is driven by the success and performance of the individual employees and the Company. Our compensation philosophy is to align Directors and Mindtree Minds compensation with our business objectives, so that compensation is used as a strategic tool that helps us recruit, motivate and retain highly talented individuals who are committed to our core values. We believe that our compensation programs are integral to achieving our goals. 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 Nomination and Remuneration Committee within the salary scale approved by the Board and Shareholders. Vigil Mechanism/ Whistle Blower Policy The Company has established a Whistle Blower Policy for Directors and employees to report their genuine concern. The details of the same is explained in the Corporate Governance Report. Related Party Transactions All Related Party Transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions were entered into with prior approval of the Audit Committee. There were no material related party transactions that required approval of the Shareholders. All Related Party transactions entered into during the quarter were placed before the Audit Committee and the Board. The policy for determining material related party transactions as approved by the Board is uploaded on the Company’s website and can be accessed at http://www.mindtree.com/policy-for-determining-material-related-party-transactions. None of the Directors or Key Managerial Personnel have any pecuniary relationships or transactions vis-à-vis the Company, compensation as disclosed in Annexure 4. The details of the related party transactions as required under Section 134 (3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached in Form AOC-2 as Annexure 5. Employee Stock Option Plans and Employee Stock Purchase Scheme Your Company believes in the policy of enabling Mindtree Minds to participate in the ownership of the Company and share its wealth creation, as they are responsible for the management, growth and financial success of your Company. Your Company currently administers seven stock option programs, viz., ESOP 1999, ESOP 2001, ESOP 2006 (a), ESOP 2006 (b), ESOP 2008A, DSOP 2006, ESOP 2010A, a stock purchase scheme namely, Mindtree Employee Restricted Stock Purchase Plan 2012 (ESPS). Details of unclaimed shares The details of unclaimed shares as required under Listing Agreement and LODR Regulations are provided in Annexure 2. Liquidity Your Company maintains sufficient cash to meet its operations and strategic objectives. Our cash and investments (net of short term borrowings) have decreased from Rs. 8,852 million as on March 31, 2015 to Rs. 3,625 million as on March 31, 2016 pursuant to acquisitions made during the year. Balance funds have been invested in deposits with banks, highly rated financial institutions and debt schemes of mutual funds. Awards and Recognitions During the year under review, your Company received the following awards and recognitions. 1. Mindtree named in the leadership zone in Zinnov’s Global Product Engineering Service Provider Ratings for the fourth time in a row. 2. Mindtree has been voted as one of the 50 Happiest Companies in America for 2016. 3. Mr. Krishnakumar Natarajan, CEO & Managing Director, Mindtree has been included among India’s Top 100 CEOs in an annual study conducted by Business Today and PwC (Jan 2016). 4. Mr. Krishnakumar Natarajan, CEO & Managing Director Mindtree has been named as the EY Entrepreneur of the Year 2015 Award by EY under the Services category (Jan 2016). 5. Mindtree has won the "Best Corporate Governance – Technology – Asia - 2015" for having exhibited exceptional leadership in the area of governance (Oct 2015). 6. Mindtree was awarded the Digital transformation Czar award under the Digital Transformation category at the CIO 100 Awards organized by the IDG group (Oct 2015). 7. Mindtree has been placed among the top ten BEST Award Winners by the Association for Talent Development for its most innovative talent development initiatives. 8. Mindtree named as the "Most Popular Organization" in the space of Talent Acquisition by the TA Leadership League Awards. 9. Mindtree won the NCPEDP-Mphasis Universal Design Award for 2015 under Category C for companies or organizations that have taken up the cause of Accessibility and Universal Design. 10. Mindtree was recognized as the EPG Emerging Azure partner of the Year in FY15 by Microsoft (July 2015). 11. Mindtree named in Forbes India’s first ever Super 50 list based on consistent shareholder returns, sales growth and return of equity (July 2015). 12. Declared the Gold category award winner of the Learning Elite awards 2015 by the Chief Learning Officer Magazine, for its innovative learning and development practices. 13. Earned a special recognition in the Sustained Excellence Category of BML Munjal Awards - 2015, organized by the Hero Group for demonstrating business excellence through its learning and development initiatives Litigation No material litigation was outstanding as on March 31, 2016. Details of litigation on tax matters are disclosed in the financial statements. Deposits In terms of the provisions of Sections 73 of the Act read with the relevant Rules of the Act, the Company had no opening or closing balances and also has not accepted any fixed deposits during the year under review and as such, no amount of principal or interest was outstanding as on March 31, 2016. Corporate Governance Your Company has been practicing the principles of good corporate governance. A detailed report on corporate governance is available as a separate section in this Annual Report. Certificate of the Statutory Auditors regarding compliance with the conditions stipulated as per Listing Agreement and LODR Regulations, is provided as Annexure-B to the Corporate Governance Report. Transfer to Investor Education and Protection Fund (IEPF) Pursuant to Section 205C and other applicable provisions of Companies Act, 1956, dividends that are unpaid/ unclaimed for a period of seven years are required to be transferred to the Investor Education and Protection Fund administered by the Central Government and once unpaid/ unclaimed dividend/ application money for allotment of any securities and due for refund, is transferred to IEPF, no claim shall lie in respect thereof against the Company. To ensure maximum disbursement of unpaid/ unclaimed dividend, the Company sends reminders to the concerned investors, before transfer of dividend to the IEPF. The Company had transferred unpaid dividend amounts within the statutory period to the IEPF. During the financial year 2015-16, unpaid or unclaimed dividend including unpaid application money which was due for refund of Rs. 274,826 was transferred to the IEPF. Attention is drawn that the unclaimed/ unpaid dividend for the financial years 2008-09 and 2009-10 is due for transfer to IEPF during September 2016 and December 2016. In view of this, the Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts, may write to the Company/ Company’s Registrar and Share Transfer Agent, Link Intime India Private Limited. The details of the consolidated unclaimed/ unpaid dividend details as required by the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, for all the unclaimed/ unpaid dividend accounts outstanding (drawn up to the date of Sixteenth Annual General Meeting on June 22, 2015) in terms of the Ministry of Corporate Affairs Notification No. G.S.R 352 (E) dated May 10, 2012 has been uploaded under the Company website: http://www.mindtree.com/about-us/investors/unpaid-dividend-information Auditors a) Auditors: The Audit Committee and the Board have recommended the proposal to ratify the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 008072S), Statutory Auditors of the Company up to the conclusion of the Eighteenth Annual General Meeting and to authorize the Board of Directors or Committee thereof to fix their remuneration. The Company has received a certificate from the Auditors to the effect that the ratification of appointment, if made, would be in accordance with limits specified by the Companies Act, 2013 and that, they meet the criteria of independence. The proposal of their ratification is included in the notice of ensuing Annual General Meeting. b) Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit has been carried out by G Shanker Prasad, Practising Company Secretary, and his report is annexed as Annexure 8. Particulars of Employees Information as required under the provisions of Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure 3 to the Directors’ Report. As per the proviso to Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of employees posted and working outside India not being Directors or their relatives, drawing more than Rs. 6 million per financial year or Rs. 500,000 per month, as the case may be, need not be included in the statement but, such particulars shall be furnished to the Registrar of Companies. Accordingly, the statement included in this report does not contain the particulars of employees who are posted and working outside India. If any Member is interested in obtaining a copy thereof, such Member may write to the company in this regard. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outflow The particulars as prescribed under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in Annexure 6. The Company has also taken several constructive steps to conserve energy through its sustainability initiatives as elaborately disclosed separately as part of the Business Responsibility Report as a separate section in this Annual Report. Directors’ Responsibility Statement Your Company’s Directors make the following statement in terms of sub-section (5) of Section 134 of the Companies Act, 2013, which is to the best of their knowledge and belief and according to the information and explanations obtained by them: (i) The financial statements have been prepared in conformity with the applicable Accounting Standards and requirements of the Companies Act, 2013, ("the Act") to the extent applicable to company; on the historical cost convention; as a going concern and on the accrual basis. There are no material departures in the adoption of the applicable Accounting Standards. (ii) The Board of Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period. (iii) The Board of Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. (iv) The Board of 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. (v) The Board of Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. (vi) The financial statements have been audited by M/s. Deloitte Haskins & Sells, Chartered Accountants, the Company’s Auditors. (vii) The Audit Committee meets periodically with the Internal Auditors and the Statutory Auditors to review the manner in which the Auditors are discharging their responsibilities and to discuss audit, internal control and financial reporting issues. (viii) To ensure complete independence, the Statutory Auditors and the Internal Auditors have full and free access to the Members of the Audit Committee to discuss any matter of substance. Management Discussion and Analysis Report Management Discussion and Analysis Report as required under Listing Agreement and LODR Regulations, is disclosed separately in the current Annual Report. Corporate Social Responsibility Initiatives As part of its Corporate Social Responsibility (CSR) initiatives, your Company has undertaken several projects in accordance with Schedule VII of the Companies Act, 2013. Mindtree implements its CSR initiatives via three channels: • Directly by Mindtree • Through MindTree Foundation • Through individual social responsibility programs undertaken by Mindtree Minds and supported by Mindtree as appropriate. Further, Mindtree’s CSR primarily focuses on programs that • Benefit the differently abled • Promote education • Create sustainable livelihood opportunities The Annual Report on CSR activities, is annexed herewith as Annexure 7. Business Responsibility Report Your Company has always been at the forefront of voluntary disclosures to ensure transparent reporting on all matters related to the Company’s governance and business operations, and has voluntarily undertaken to publish the required data to extent applicable and accordingly, the Business Responsibility Report is annexed in the Annual Report. The said report comprehensively covers your Company’s philosophy on corporate social responsibility, its sustainability activities pertaining to efforts on conservation of environment, conducting green awareness events, its commitment towards society, enhancing primary education, initiatives and activities taken up as part of this philosophy for the year 2015-16. Insider Trading Regulations Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the code of conduct for prevention of insider trading and the code for corporate disclosures ("Code"), as approved by the Board from time to time, are in force by the Company. The objective of this Code is to protect the interest of Shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated Employees and other employees. The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Officers, Designated Employees, other employees and any other person having potential access to the unpublished price sensitive information, by virtue of his association with the Company from trading in securities of Mindtree Limited at the time when there is unpublished price sensitive information. Mr. Jagannathan Chakravarthi, CFO, has been appointed by the Board of Directors to act as Compliance Officer under the Code. Internal Control Systems and Adequacy of Internal Financial Controls The Company has a proper and adequate system of internal controls. This ensures that all transactions are authorised, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition. In addition there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls. An extensive programme of internal audits and management reviews supplements the process of internal financial control framework. Properly documented policies, guidelines and procedures are laid down for this purpose. The internal financial control framework has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets. In addition, the Company has identified and documented the risks and controls for each process that has a relationship to the financial operations and reporting. The Company also has an Audit Committee, comprising 4 (four) professionally qualified Directors, who interact with the Statutory Auditors, Internal Auditors and Management in dealing with matters within its terms of reference. This Committee mainly deals with accounting matters, financial reporting and internal controls. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. Any other material changes and commitments Any material changes and commitments affecting the financial position of the Company, occurred between April 1, 2016 and the date of signing of this Report has been reported in the financial statements. Audit Committee Recommendation During the year all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure 4. Significant & Material Orders passed by the Regulators or Courts There are no significant and material orders passed by the Regulators or Courts, during the year under review. Particulars of Loans, Guarantees and Investments u/s 186 The details of the investments made by the Company including those covered u/s 186 are in Note No. 3.4.2 and 3.5.1 of the audited financial statements. Risk Management Policy The Company has a robust Enterprise Risk Management (ERM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. The Company has identified various risks and also has mitigation plans for each risk identified. Listing Fees The Company affirms that the annual listing fees for the year 2016-17 to both National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) have been paid. Acknowledgements The Board places on record, their deep sense of appreciation to all the Mindtree Minds, support staff, for adopting to the values of the Company, viz., collaborative spirit, unrelenting dedication and expert thinking, for making Mindtree an expertise led organization and the Company’s customers for letting us deliver the Company’s Mission statement, to engineer meaningful technology solutions to help the businesses and societies flourish. The Board also immensely thank all the Shareholders, investors, vendors, service providers, bankers and academic institutions and all other stakeholders for their continued and consistent support to the Company during the year. Your Directors would like to make a special mention of the support extended by the various Departments of Government of India, the State Governments, particularly, the Software Technology Parks-Bengaluru, Bhubaneswar, Chennai, Hyderabad, Pune and other Government and State Government agencies, the Tax Authorities, the Ministry of Commerce, Reserve Bank of India, Ministry of Corporate Affairs, Ministry of Communication and Information Technology, Ministry of Finance, the Customs and Excise Departments, Securities and Exchange Board of India, Stock Exchanges and other governmental/ Semi-governmental bodies and look forward to their continued support in all future endeavors. For and on behalf of the Board of Directors Krishnakumar Natarajan Chairman Date: April 18, 2016 Place: Bengaluru |