The Board of Directors ("Board") of Mindtree Limited ("Company") with immense pleasure present their sixteenth report on the business and operations of your Company for the financial year 2014-15. This Report is being presented along with the audited financial statements for the year.
The details about Global Economic & Business Environment are provided under the section Management Discussion & Analysis of this Annual Report.
Revenue for the year is ₹ 35,474 million signifying a growth of 17% in Rupee terms. Your Company had 217 active customers as on March 31, 2015 of which 88 accounts had revenues in excess of US$ 1 million, 28 accounts had revenues in excess of US$ 5 million, 14 accounts had revenues in excess of US$ 10 million, 6 accounts had revenues in excess of US$ 20 million, 4 accounts had revenues in excess of US$ 30 million and 1 account had revenues in excess of US$ 50 million.
EBITDA margins have marginally dropped from 20.1% in the previous year to 19.9% in the current year. Our effective tax rate is about 22.3% as compared to about 22.03% in the previous year. PAT has increased by 18.4 % to ₹ 5,343 million as compared to ₹ 4,512 million in the previous year.
The particulars of some of the key business developments which took place during the financial year 2014-15 have been detailed out under the section Management Discussion & Analysis of this Annual Report.
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 2014-15. The details of interim dividends declared are as below:
Your Directors have also recommended the following final dividend for the financial year ended March 31, 2015, which is payable on obtaining the Shareholders' approval in the Sixteenth Annual General Meeting:
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 ₹ 1,714 million as compared to ₹ 1,221 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.
Your Company issued 276,980 equity shares of ₹ 10/- each, to various Mindtree Minds and to Directors on exercise of stock options during 2014-15. In addition, the members are aware that the Company had issued and allotted 41,765,661 equity shares of ₹ 10/- each as Bonus shares. Consequently, the paid-up equity share capital has increased from ₹ 416,897,310 as on March 31, 2014 to ₹ 837,323,720 as on March 31, 2015.
In the beginning of year, your Company had 1,721,369 sq. ft. of space consisting of 12,730 seats spread across various locations in India. Following are the key changes during the year.
Bengaluru - Mysore road: your Company added 55,000 sq. ft. consisting of 614 seats. We have plans to add about 1,100 seats in next financial year in this facility.
Bengaluru - Whitefield: your Company added 70,000 sq. ft. consisting of 737 seats. We have plans to carry out interiors in the remaining 64,000 sq. ft. area consisting of 550 seats during 2015 in this facility. We will have LEED Platinum certification for this facility.
Pune: Interior work was done during the year and we have added 406 seats in the existing building in the 4th floor.
Hyderabad: One new floor measuring 43,500 sq. ft. has been added. It consists of 373 seats.
Bhubaneshwar: Mindtree Kalinga consisting of training and residential facility for 500 campus minds became operational partially on March 15, 2015 at Bhubaneswar, Odisha. This is a state-of-the-art training and development center. This facility measuring 272,000 sq. ft. has been built using 1 million compressed soil blocks manufactured at site. We believe this is the first time anywhere in the world, a building has been built to this magnitude using mud blocks. Other important sustainability related features of this facility are passive cooling system and storage and usage of rain water using an artificial lake with a capacity of 14.7 million litres. We plan to have LEED Platinum certification for this facility.
In all, your Company has sufficient capacity to meet its growth needs over short and medium terms. Your Company has adopted the LEED green building design for infrastructure in many projects. The infrastructure arrangements we have in our facilities assist greatly in promoting work-life balance.
Details of Subsidiary Companies, Joint Ventures and Associate Companies, and their financial position.
Your Company has two direct subsidiaries, and two step down subsidiaries as at March 31, 2015, the names of which are as under:
1Date of acquisition
The statement containing salient features of the financial statement of the above subsidiaries in Form AOC-1 is given in Annexure 1.
For Mindtree “Welcome to possible” is more than a slogan - it reflects our approach to every engagement. Some believe in the power of numbers. Some believe in the power of technology. We believe in the power of people. And the impact people can have on technology. Our roots grew from this belief that people with diverse points of view could come together to build a different kind of technology company. One that puts people who work with us, first. And this belief drives our vision for tomorrow to build technology experts who are focused on one goal: helping our clients succeed. Today, a wealth of information is opening up a world of possibilities. Realizing those possibilities takes more than numbers. It takes more than technology. It takes people. People who can turn the potential of information into meaningful solutions. Solutions that simplify businesses. Improve Governments. Propel societies forward.
The expert Mindtree Mind is to be cultivated and cared for in a conscious way in order to be created. The way we approach development of our people is akin to that of a gardener tending to his garden, planting the saplings or replanting the plants and nurturing them by creating the right environment needed for their growth.
Orchard is our program for young minds who enter our enterprise from the campuses they graduate from. Fresh minds, just like sapling are keen with curiosity, energy with enthusiasm and tender in disposition. Orchard is their first brush with the environment and the care taken here determines their growth ahead.
Arboretum is our on-boarding platform for experienced talent pool, our lateral hires. Before they get into projects, Arboretum acclimatizes them to the new environment, exposing them to the Mindtree culture.
Culture & Competence doesn't just train minds to meet organization goals but to develop them as competent and complete individuals and to aim at an enculturation of them into our strong work culture.
Grooming future leaders. Expert minds can be created with rigorous trainings but expert minds with leadership capabilities can be groomed only with effective coaching and mentoring. Our vision of leadership development sees a leader emerging out of his/her strengths on the four agility factors - mental, people, change & result, combined with at least one of the four competencies and catalyzed by the extent of self-awareness.
Mindtree's people strategy is to inculcate a high performance culture. The critical ingredients that nurture performance assessment and development are: Simplicity - A more efficient and engaging system (PACE) that facilitates seamless and less time consuming appraisal process. Goal Setting and performance linkage - Power of cascading organization's vision to all levels, power of social goal setting (linking goals with each other) & role based goal setting. Meaningful reviews - which create the expertise driven performance culture. Feedback and conversations in our day to day work and individual development plan. The Pillars Program at Mindtree has been designed to reward high performers and recognize the contributions of their family. The program aims to nurture and retain star performers, build a robust leadership pipeline and engage with the extended Mindtree family. At Mindtree, recognition is expressed in many ways. Recognition is integral to our culture - we celebrate things big and small - and we strive to find new ways to appreciate one another every day. SPOT ON drives our recognition philosophy.
The total number of Mindtree Minds as on March 31, 2015 was 14,202 as against 12,926 as on March 31, 2014.
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 2014-15:
a) No. of SH complaints received: 10
b) No. of SH complaints disposed off: 10
The Board of Directors of the Company met six times during the financial year. 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”).
With effect from May 20, 2014, Mr. Rostow Ravanan has been appointed as an Executive Director. With effect from May 20, 2014 Ms. Manisha Girotra has been appointed as a Non-Executive & Independent Director.
As per Article 109 of 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. Mr. Rostow Ravanan retires by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting.
Your Board has also proposed for the continuation of Mr. Ramesh Ramanathan and Prof. Pankaj Chandra as Independent Directors till March 31, 2018, by altering the term of their office as Independent Directors within the meaning of the Act.
Your Directors recommend that the resolutions relating to the re-appointment of Mr. Rostow Ravanan (who is liable to retire by rotation), as Executive Director, fixing of tenure of office for Executive Chairman Mr. Subroto Bagchi, appointment of Mr. Ramesh Ramanathan, and Prof. Pankaj Chandra as Independent Directors, not liable to retirement by rotation, be passed. Pursuant to the provisions of Clause 49 of the Listing Agreement, brief resumes of these Directors are furnished along with the Explanatory Statement to the notice to the Sixteenth Annual General Meeting.
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.
Mr. S Janakiraman, who was appointed as an Executive Director of the Company with effect from July 16, 2008, resigned with effect from October 20, 2014. Prof. David B. Yoffie, an Independent Director on the Board has resigned as a Director with effect from March 30, 2015.
Mr. Rajesh S Narang, Vice-President & Company Secretary, resigned with effect from February 13, 2015.
The Board of Directors of your Company, place on record their deep appreciation to Mr. S Janakiraman, Prof. David B Yoffie, and Mr. Rajesh S Narang, and wish them the very best in their future endeavours.
Mr. Rostow Ravanan, Executive Director, who was also donning the role of a CFO, has now ceased to be the CFO with effect from April 01, 2015, and the Board has appointed Mr. Jagannathan Chakravarthi as the CFO. Mr. Rostow Ravanan will assume his new role to lead the Enterprise Service Lines and Key Accounts Group along with oversight of European operations
The information relating to remuneration of directors as required under section 197(12) of the Act, is given in Annexure 3.
The Company has the following Committees of the Board:
1 Audit Committee;
2 Nomination and Remuneration Committee@;
3 Stakeholders Relationship Committee;
4 Administrative Committee;
5 Strategic Initiatives Committee;
6 Corporate Social Responsibility Committee; and
7 Risk Management Committee
@The Company had two separate committees viz: Compensation Committee; and Nomination and Corporate Governance Committee. These two committees were unified to form the Nomination and Remuneration Committee on March 30, 2015.
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 & Corporate Governance Committee / Remuneration Committee under the provisions of section 178(4) of the Act, is as below:
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 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 & Remuneration Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director:
d. In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.
Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its performance, the Directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration Committees.
For this purpose the Board had engaged a third party with experience in carrying out such evaluation of Board and the findings were shared individually with the Board Members as well as the Chairman.
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 Compensation Committee within the salary scale approved by the Board and Shareholders.
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.
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 are 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 are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The statement is supported by a certificate from the CEO & MD and the CFO.
The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The policy on 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-related-party-transactions. None of the Directors 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 13(3)(h) r/w Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure 5.
Your Company believes in the policy of enabling Mindtree Minds to participate in the ownership of your 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 2008 (A), DSOP 2006, ESOP 2010 (A), a stock purchase scheme namely, Mindtree Employee Restricted Stock Purchase Plan 2012, and a Phantom Stock Options Plan.
A Reconciliation Statement of the Equity Shares approved in-principle and later allotted and listed till March 31, 2015 is given below:
Details of the shares issued under Employee Stock Option Plan (ESOP) and Employee Stock Purchase Scheme (ESPS), as also the information as required under Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, and also the information required under the Guidance note of ICAI are set out in the Annexure 2 to this report. The Board has proposed certain variations to the ESPS, to make the same to be in conformity with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, and the same is placed before the shareholders for their approval. No employee was granted options, during the year, equal to or exceeding 1% of the issued capital.
Details of options granted to Senior Managerial Personnel and Directors during the financial year 2014-15 (including persons who have received grants amounting to 5% or more of the RSUs granted during the year) are as under:
Your Company maintains sufficient cash to meet its operations and strategic objectives. Our cash generation during the year has been healthy. Our cash and investments (net of short term borrowings) have increased from ₹ 6,413 million as on March 31, 2014 to ₹ 8,852 million as on March 31, 2015. These funds have been invested in deposits with banks, highly rated financial institutions and debt schemes of mutual funds.
During the year under review, your Company received the following awards and recognitions.
No material litigation was outstanding as on March 31, 2015. Details of litigation on tax matters are disclosed in the financial statements.
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, 2015.
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 in Clause 49 of the Listing Agreement is provided separately under this Annual Report.
The Company engaged an external firm to conduct a review of the effectiveness of Board processes at Mindtree. The feedback from the review was that many of the processes followed by Mindtree meet global best practice benchmarks as well as some areas where we further strengthen our processes. We are working on implementing these recommendations.
Pursuant to Section 205C and other applicable provisions of Companies Act, 1956 (the corresponding provision in the Companies Act, 2013 have not been notified, and hence the earlier law is still applicable in respect of these provisions), 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 IEPF.
The Company had transferred unpaid dividend amounts within the statutory period to the IEPF. During the financial year 2014-15, unpaid or unclaimed dividend including unpaid application money which was due for refund of ₹ 716,667/- was transferred to the IEPF.
Attention is drawn that the unclaimed/unpaid dividend for the financial years 2008-09 is due for transfer to IEPF during September 2015 and October 2015. 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 upto the date of Fifteenth Annual General Meeting on July 18, 2014) 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/unpaid-dividend-information.
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 ₹ 6 million per financial year or ₹ 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.
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 annexed to the current Annual Report.
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:
Management Discussion and Analysis Report as required under Clause 49(VIII) (D)(1) of the Listing Agreement is disclosed separately in the current Annual Report.
As part of its Corporate Social Responsibility (CSR) initiatives, the Company has undertaken several projects in accordance with Schedule VII of the Companies Act, 2013. Mindtree implements its CSR initiatives via three channels:
Further, Mindtree's CSR will primarily focus on programs that:
The Annual Report on CSR activities, is annexed herewith as Annexure 7.
Your Company continues its journey of delivering value to its clients through investments in quality programs. Your Company has adopted several external benchmarks and certifications. Your Company is certified under various standards to meet clients' requirements and enhancing valuable delivery and following is the summary of certifications held by your Company:
For the last two years, your Company has partnered with an independent firm to do its annual relationship survey with customers. Your Company continues to leverage this relationship to bring best practices into the engagement process as well as bring in industry insights.
The details about customer satisfaction survey are provided under the section Management Discussion and Analysis of this 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 2014-15.
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 1992, 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 and other employees from trading in the securities of Mindtree Limited at the time when there is unpublished price sensitive information. The Board has appointed Mr. Rostow Ravanan, Executive Director as Compliance Officer under the Code.
No other material changes and commitments affecting the financial position of the Company has occurred between April 1, 2015 and the date of signing of this Report.
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.
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.
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure 4.
There are no material litigation outstanding as on March 31, 2015. Details of litigation on tax matters are disclosed in the financial statements.
The details of the investments made by the Company are in Note No. 3.4.2 and 3.5.1 of the audited financial statements. The Company has not made any loans to any persons within the meaning of Section 186 and has also not given any guarantees within the meaning of that section.
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.
The Company confirms that it has paid the annual listing fees for the year 2015-16 to both National Stock Exchange and Bombay Stock Exchange.
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 sprit, unrelenting dedication and expert thinking, to be 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 thanks 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 and others and look forward to their continued support in all future endeavors.
For and on behalf of
the Board of Directors
April 16, 2015
1) No corresponding figures for previous year has been provided for Discoverture Solutions LLC, as the Company became a subsidiary only on February 13, 2015.
2) The detailed financials of the Subsidiary Companies shall be made available to any Shareholder seeking such information.
3) Discoverture Solutions LLC, has two step down subsidiaries and the details of step down subsidiaries are as below
No corresponding figures for previous year has been provided for the above two step down subsidiaries, as Discoverture Solutions LLC, (the intermediate holding company) became a subsidiary of the Company only on February 13, 2015.
The Company does not have any associate companies and joint ventures.
For Mindtree Limited
CEO & Managing Director
Chief Financial Officer
The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.
The Company has instituted the Employees Stock Option Plan ('ESOP') in fiscal 2000, which was approved by the Board of Directors ('Board'). Your Company currently administers seven stock option programs, viz., ESOP 1999, ESOP 2001, ESOP 2006 (a), ESOP 2006 (b), ESOP 2008 (A), DSOP2006, ESOP 2010 (A), a stock purchase scheme namely, Mindtree Employee Restricted Stock Purchase Plan 2012 and a Phantom Stock Options Plan.
Summary information of these various stock option programs of the Company is provided under Notes to Accounts under Standalone Financial Statements of this Annual Report.
The Company has recorded compensation cost for all grants using the intrinsic value- based method of accounting, in line with prescribed SEBI guidelines.
Had compensation been determined under the fair value approach described in the Guidance Note on, “Accounting for employee share based payments” issued by ICAI, the Company's net profit and basic and diluted earnings per share would have reduced to the proforma amounts as indicated:
For Program II, IV, V & VI - Options granted are related to Bonus Shares.
** Due to different exercise prices for program No IV,V & VI - Weighted average prices taken as exercise price.
For and on behalf of the Board of Directors
April 16, 2015
Note: All are permanent employees, and are governed by letter of employment.
For and on behalf of the Board of Directors
April 16, 2015
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
(I). Category wise Share Holding
(I). Category wise Share Holding
There was a bonus issue in the ratio of 1:1 during the year under review and % changes for FY 2014 - 15 have been calculated by considering the bonus allotment.
(ii) Shareholding of Promoters and Persons Acting in Concert
(iii) Change in Promoter's Shareholding including Date wise increase / decrease in each of the Promoter's Shareholding during the year specifying the reasons for increase / decrease
Change in Shareholding of Persons acting in concert (“PAC's”) including Date wise increase / decrease in each of the PAC's Shareholding during the year specifying the reasons for increase / decrease
Change in Shareholding of Persons acting in concert including Date Wise increase / decrease in the Shareholding of Seema Ravanan
(IV). Shareholding Pattern of top ten Shareholders (other than Directors & Promoters)
*The figure 825,137 is net of Bonus issue of 875,137 and sale of 50,000 shares on the same date.
(V) Shareholding of Directors and Key Managerial Personnel
Change in KMP's shareholding including Date Wise increase/ decrease in the Shareholding of Rajesh Srichand Narang - Vice-President-Legal and Company Secretary - resigned with effect from February 13, 2015.
Indebtedness of the Company including interest outstanding/accrued but not due for payment
There were no penalties or punishments levied on the Company during the year. Also, there was no necessity for the Company to compound any offence.
For and on behalf of the Board of Directors
April 16, 2015
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
For and on behalf of the Board of Directors
April 16, 2015
We continue to focus on strategic and emerging technologies critical for future business. Specifically, the four pillars of digital business viz., Social, Mobile, Analytics and Cloud Computing (SMAC) and the emerging Internet of Things (IoT) have been nurtured.
Mindtree was born digital and has increased its focus on emerging technologies in the digital space. We have built deep expertise in defining and realizing Digital Transformations for large enterprises.
Focus on digital technologies (SMAC) over the past year has positioned us to take on future challenges as these technologies have matured. Deep expertise built on these technologies over the past year along with strategic partnerships, innovative execution models and platforms & solutions built, will aid our growth.
Social - We are currently building a platform for Social Network Analytics using which consumer facing digital solutions could be made contextual and personal to consumers, while providing the ability to cross-sell and up-sell. We have also built interesting solutions using gamification concepts and weaving in social concepts like "Wall", "Chat", "Share", etc., into enterprise applications.
Mobile - Our "Mobile first" engineering culture has created simple, elegant & innovative solutions for customers in domains like hospitality, banking, retail, etc., In July 2014, Mindtree was chosen by ING Vysya, a premier private sector bank, for its next generation mobility program.
Mindtree and SAP - market leader in enterprise application software, announced their first Managed Mobility Offering for the Australia market. In this model, our Company will deliver SAP mobile solutions in cloud, with a pay-by-usage model.
We have also built a partnership with Xamarin and have sponsored the Xamarin Evolve 2014, an annual worldwide developer conference held in October 2014 at Atlanta.
Analytics - Big Data and Analytics has been an industry hot topic for the last several years and will continue as one of the top agendas at the CxO level for the next several years. In addition to SMAC and IoT we are adding more imperatives for organizations to deal with the onslaught of data and real time decision making. We have focused our efforts to build innovative Big Data, Analytics and Visualization solutions to deliver superior business-outcomes for clients.
The growing opportunity to make sharper business decisions based on advanced analytics and machine learning, using both internal company data and external third party data - in near real-time - is one area that has been prioritized. A Big Data Analytics Lab was established and several centers of excellence, to focus on solutions development and collaboration with several startup companies who are bringing disruptive innovations in this space.
Solutions built by our Company are casting a wider net to address several areas including "integrated customer insight", "Big Data as a Platform", "Engaged Banking", "Insurance Churn Management", "Gamers Insight", "Geo-Spatial Analytics", etc., to name a few.
Cloud - As organizations across the world adopt cloud computing, the nature and maturity of cloud computing is evolving to meet these needs. Need for portability across cloud providers has led to the emergence of cloud management platforms and evolution of technologies towards containerization from simple virtual machine technologies. This has reduced the gap between IaaS and PaaS and is significantly changing the way DevOps is being implemented. Recognizing this shift, Mindtree has invested in containerization and new age PaaS and is working with customers in applying these solutions to solve their problems. Our expertise in this area is now primed for growth and has witnessed significant interest from clients.
Microsoft has seen immense growth with millions of clients making Microsoft Azure one of the most successful platforms for building cloud solutions. Microsoft has chosen to work even closer with its top Azure partners by creating the Microsoft "HiPo" program for "High Potential Azure Partners". Effective December 2014, our Company has been selected by Microsoft to join their new "Azure High Potential Partner Program". Our Company is now a Globally Managed, Gold-Certified Azure Partner for Microsoft. Microsoft recognizes that our Company employs thousands of the finest Architects, Engineers, Consultants and Cloud specialists - all of whom can share this tremendous opportunity to build and deliver Azure based solutions that solve real business problems and enable our customers to adopt cloud.
Your Company has been known for its consistent belief in investing in technology and innovation for securing its future. In this financial year, we have strengthened this further by carving out Centers of Excellence (CoE) under the CTO organization, tasked with all round concerted thrust on emerging technologies and to understand their role in the context of business of customers. In these CoEs, the following emerging technologies were explored in depth and several reusable assets were built to enable delivery.
Internet of Things - Your Company has 15 years of deep expertise in short range wireless connectivity technologies which is one of the most critical enabler for the Internet of Things. In continuing with its leadership in the Bluetooth© and Bluetooth Smart© technologies, we became the first company in the industry to achieve the compliance certification and interoperability verification of the Bluetooth Smart version 4.2. This version of the specification has advanced features to enable stronger security & privacy as well as higher data rates. These features will accelerate the adoption in markets like wearables, smart homes and connected medical devices to name a few. It also enables seamless connectivity over IPv6 which makes Bluetooth Smart the best connectivity technology for the Internet of Things (IoT) market.
Besides wireless connectivity, your Company has established deep domain expertise in wearable devices, embedded intelligence, data communication, cloud computing and data analytics. Internet of Things is an end-to-end play of all these technologies culminating in the transformation of the IT-driven enterprise into a real-time data-driven enterprise. This year, we have created an IoT Center of Excellence (CoE) to bring all the above technologies in delivering IoT solutions to our customers across all our industry verticals under one umbrella.
The CoE delivered a custom training and expertise building program enabling over 100 IoT engineers. The CoE created industry use, case specific IOT solutions for Smart Premises, Travel and Transport, Insurance and Fitness and wellness monitoring, leveraging leading IOT devices and platforms such as the Intel GalileoTM and EdisonTM, ARM MbedTM, XivelyTM etc., your Company forged crucial solution integration and value added reselling partnerships with industry leading IOT Backend PaaS platforms such as ThingWorxTM and Microsoft AzureTM.
Future languages & data stores - We have also invested in building capabilities and solutions using future functional languages like Scala & Erlang and future data stores like Cassandra, MemSQL, NuoDB, HBASE, etc.,
Future Microsoft technologies - We have also started building capabilities and solutions using emerging Microsoft technologies like .NET 4.5, SQL Server 2014, HDInsight, Machine Learning, Mobile services, etc.,
Mindtree has focused its efforts to build innovative cloud-hosted platforms to deliver superior business-outcomes for clients. The growing opportunity to make sharper business decisions, based on predictive analytics and machine learning, using both internal company data and external third party data - in near real-time - is one area that has been prioritized.
The consumer and packaged goods sector is a key target market, where clients are seeking to optimize their product assortment being sold to each store for maximizing same-store sales. Offering this service in large emerging markets with thousands of small stores is especially difficult. Your Company is uniquely positioned to do this, given its past experience and knowledge of the area.
Similarly, the retail sector also has tremendous opportunities to improve the shopper experience in what we call the 'Phygital' world. The 'Phygital' World is one where shoppers move from online to offline and back, seamlessly while they search, research, buy products and services. Enabling a highly personalized and superior shopping experience in this environment is one of the other prioritized solution areas. This work is being backed by in-depth research of shopper preferences conducted in US, UK and Europe, which has been widely reported in public media.
The other key aspect of these solutions is that they are being designed to be run in cloud-hosted multi-tenant environments for faster client onboarding and lower operating costs. The business-critical nature of the services will also ensure client stickiness.
Digital Video Surveillance Solutions - We are currently focusing on state-of-the-art IP based video surveillance management, recording and analytic products and solutions. Your Company has more than 30 technology and system integration partners in India and world-wide and has participated in several conferences (shows) around the country. The key products in Digital Video Surveillance portfolio include the following:
Mindtree has filed 4 patents in India and US so far in the area of Video analytics and all 4 US Patents have been granted.
We identified a need to accelerate the business case creation for digital solutions in customer enterprises. This need was arose from the IT and business groups. The reason for stagnation at business case stage was due to the large volume of opportunity in digital that needed to be validated and conceptualized with limited bandwidth.
We set out and created an innovation lab called 'The Digital Pumpkin' to ease business case creation and release more projects into build phase. It is a co-innovation & co-creation platform for our customers and prospects. The Digital Pumpkin engages business & IT community of target enterprise to rapidly innovate, prototype and validate viability of digital solutions for their business. At The Digital Pumpkin, creativity and technology were applied that resulted in creation of about 40+ concepts in this year.
Information and communication technology industry by its nature is a fast evolving industry with multiple competing technologies and innovations. It is therefore critical for your Company to continue its R&D efforts not merely to stay abreast of the developments, but to stay ahead in assessing the emerging trends. Your Company, through such R&D investments, is able to advice and help its customers to adopt and absorb the right technologies in their business transformative journey.
Mindtree will continue to invest in R&D initiatives, especially in emerging technologies. Under the CTO organization, we will focus on emerging technology spaces like Cognitive computing and related technologies like machine learning, deep learning & predictive analytics. We will also invest in reimagining engineering digital solutions using automation technologies and tools.
We are proactively investing in the Centers of Excellence & Digital pumpkin to foster early experimentation of technology to build innovative solutions and thereby help our customers build next generation products & solutions. We provide our employees with a 'state of the art' working environment, enabling them to optimize their performance & productivity. The excellent communication infrastructure put in place by us ensures that the employees get to work on the same environment that the customers' engineering teams work on.
The communication infrastructure also enables our employees working onsite to work very closely, with their counterparts, in India, enabling a 24- hour delivery model. The adoption of latest technology along with the investments in R&D enables us to be the preferred technology solutions provider to many leading global corporations.
Your Company has spent ₹ 212 million on research and development during the year 2014 - 15
For and on behalf of the Board of Directors
April 16, 2015
(a) Directly by Mindtree
(b) Through MindTree Foundation
(c) Through "Individual Social Responsibility" programs undertaken by Mindtree Minds and supported by Mindtree as appropriate
Further, Mindtree's CSR primarily focuses on programs that
(a) Benefit the differently abled
(b) Promote education
(c) Create sustainable livelihood opportunities
The CSR policy of the Company is stated in
The current members of the CSR Committee of the Board are:
(a) Mr. Subroto Bagchi, Chairman
(b) Prof. Pankaj Chandra, Member
(c) Mr. N S Parthasarathy, Member
(d) Mr. Rostow Ravanan, Member
(a) Total amount spent for the financial year: ₹ 40,009,119
(b) Amount unspent if any: ₹ 28,554,757
(c) Manner in which the amount spent during the financial year is detailed overleaf:
CEO & Managing Director
Date: April 16, 2015
Chairman of CSR Committee
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2015
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014]
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Mindtree Limited (hereinafter called the “Company”). The Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2015 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2015 according to the provisions of:
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;
c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;
e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
(i) Draft Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii)The Listing Agreements entered into by the Company with National Stock Exchange and Bombay Stock Exchange; During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
I further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period the Company has duly issued bonus shares and increased the authorised capital of the Company.
April 16, 2015
G. SHANKER PRASAD
CP No; 6450