(As approved by the Board of Directors on October 21, 2016)
Mindtree looks upon good Corporate Governance practices as a key driver of sustainable corporate growth and long term stakeholder value creation. Good Corporate Governance Practices enable a Company to attract high quality financial and human capital. In turn, these resources are leveraged to maximize long-term stakeholder value, while preserving the interests of multiple stakeholders, including the society at large. Our Dividend philosophy is in line with the above principles. Our Dividend payout ratio has increased consistently from 7% in FY12 to 29% in FY16. Subject to business requirements and general economic conditions, the Company will attempt to maintain a consistent dividend record to reward shareholders.
Declaration of Dividend:
In line with the philosophy described above, the Board reviews the operating performance every quarter and may recommend interim / final dividends from time to time. All dividends are subject to statutory regulations and approvals, as applicable. Overall, the dividend payout in each year will depend upon business performance, investment requirements of the annual operating plan for the year and any other strategic priorities identified by the Company.
Per share basis:
The dividend will be declared on per share basis only.
Circumstances under which the shareholders of the listed entities may not expect dividend:
The Board may choose not to recommend a dividend, if there are important strategic priorities which require large investments that would deplete the company’s cash reserves or uncertainties in the business performance in the near to medium term.
Financial parameters considered while declaring dividend:
The financial parameters that may be considered before declaring dividend are profitability, cash flow and future growth and profitability outlook of the company
Internal and external factors considered while declaring dividend:
The Board leads the strategic management of the company on behalf of the Shareholders, exercise supervision through direction and control and appoints various committees to handle specific areas of responsibilities. In this endeavor, the Board reviews various types of information provided to it which has a bearing on declaring dividend. Key internal and external factors are listed below (not exhaustive):
- Annual operating plans, budgets, updates
- Capital budgets
- Quarterly and Annual results
- Investments including Mergers and Acquisitions (M&A)
- Strategic updates
- Funding arrangements
- Any other matter / risks
- Macro-economic environment
- Legislations impacting business
- Client related risks
- Any other matter / risks
Usage of retained earnings:
Retained earnings would be used to further the company’s business priorities. If there are excess reserves beyond the medium to long term business requirements, the retained earnings would be distributed to shareholders via Dividends or other means as permitted by applicable regulations.
Parameters that are adopted with regard to various classes of shares:
Currently, the Company has only one class of shares. If the Company has more than one class of shares in future, dividend for each class would be subject to prescribed statutory guidelines as well as terms of offer of each class to the investors of that class of shares. To the extent permitted, the Company would aim for highest level of transparency and equitable treatment of all investors.