LTIMindtree Ltd
Directors Reports
To the Members of LTIMindtree Limited
(formerly Larsen & Toubro Infotech Limited)
Your Directors have pleasure in presenting the Integrated Annual Report along with the
Audited Financial Statements (Standalone and Consolidated) of LTIMindtree Limited
('LTIMindtree' or 'the Company') for the year ended March 31, 2023 ('FY23').
FINANCIAL RESULTS
|
|
|
|
(Rs. in Mn) |
|
Standalone |
Consolidated |
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Revenue from operations |
319,754 |
248,454 |
331,830 |
261,087 |
Other income |
5,008 |
8,886 |
5,569 |
7,658 |
Total revenues |
324,762 |
257,340 |
337,399 |
268,745 |
Employee benefit expense |
194,274 |
148,835 |
208,799 |
159,892 |
Sub-contractor expenses |
33,421 |
26,010 |
28,286 |
23,591 |
Finance costs |
1,440 |
1,187 |
1,504 |
1,234 |
Depreciation and amortization expenses |
6,392 |
5,301 |
7,227 |
5,971 |
Other expenses |
33,355 |
23,938 |
33,668 |
25,118 |
Total expenses |
268,882 |
205,271 |
279,484 |
215,806 |
Profit before tax |
55,880 |
52,069 |
57,915 |
52,939 |
Tax expense |
13,317 |
12,946 |
13,812 |
13,439 |
Profit for the year |
42,563 |
39,123 |
44,103 |
39,500 |
PERFORMANCE OF THE COMPANY
On a consolidated basis, revenue for the year was Rs.331,830 Mn signifying a growth of
27.1 % in rupee terms. The increase in revenue is attributable to growth across all
verticals, predominantly Banking, Financial Services & Insurance, High-Tech and Media
& Entertainment. Profit after tax on a consolidated basis for the year was Rs.44,103
Mn signifying an increase of 11.7%. For more details, refer to the 'Financial Performance'
section in the Management Discussion and Analysis, which forms part of the Integrated
Annual Report.
AMALGAMATION AND ARRANGEMENT
a. Amalgamation of Mindtree Limited
During the year under review, the Scheme of Amalgamation and Arrangement under Sections
230-232 of the Companies Act, 2013 amongst Larsen & Toubro Infotech Limited (LTI) and
Mindtree Limited (Mindtree) and their respective Shareholders & Creditors, inter-alia,
for amalgamation of Mindtree with LTI ("the Scheme"), was approved by the
shareholders and creditors of these companies at their respective meetings held pursuant
to the order(s) of the Hon'ble National Company Law Tribunal (NCLT), Mumbai &
Bengaluru Bench. Thereafter, the Scheme was sanctioned by NCLT, Mumbai vide its order
passed dated September 19, 2022 and NCLT, Bengaluru vide its orders passed dated November
4, 2022 & November 10, 2022. The Scheme came into effect from November 14, 2022.
In terms of the Scheme, the name of your Company was changed from 'Larsen & Toubro
Infotech Limited' (LTI) to 'LTIMindtree Limited', w.e.f. November 15, 2022.
As per the Share Exchange Ratio enshrined in the Scheme, during the year under review,
your Company allotted its 12,04,17,607 equity shares of RS.1/- each on November 25, 2022,
to the shareholders of Mindtree as on the Record Date i.e., November 24, 2022 fixed for
the said purpose. These shares were listed on BSE Limited (BSE) and National Stock
Exchange of India Limited (NSE) on December 5, 2022. Further, in accordance with the
Scheme, net sale proceeds of the fractional entitlements to the equity shares of the
Company arising out of allotment of shares of the Company as per the abovementioned Share
Exchange Ratio, were distributed amongst the eligible shareholders of Mindtree.
b. Amalgamation of subsidiaries
As part of the entity rationalization plan, during the year under review, the Board of
Directors upon recommendation of the Audit Committee and subject to requisite approvals,
approved a Scheme of Amalgamation of Powerupcloud Technologies Private Limited, Lymbyc
Solutions Private Limited and Cuelogic Technologies Private Limited (Subsidiaries) with
the Company. The Appointed Date as per the Scheme of Amalgamation is April 1, 2023. The
scheme is yet to be sanctioned by NCLT.
MARKETING
With the merger of LTI and Mindtree, LTIMindtree is proud to have entered the elite
league of top-tiered IT services companies. Your Company's expansion in India and Europe
has enabled to offer cutting-edge solutions that provide the clients, innovative and
cost-effective services. The opening of state-of-the-art Digital Experience Centre in
Hyderabad, Insurance Data and Analytics Innovation Center in Kolkata, and a Delivery
Center in Poland have marked significant milestones in your Company's continued effort to
re-imagine outcomes for the clients and unlock new possibilities by placing the most
optimal intelligence, insights, innovation, and investments at the core of value.
Your Company is also proud to be recognized as a Top Employer in the UK for the third
consecutive year and awarded Best Organization for Women 2023 by The Economic Times, a
testament to its commitment to creating an inclusive workplace that values diversity and
fosters equality. Your Company will continue to invest in innovative solutions that would
enable to stay ahead of the curve in the IT services industry and remain committed to
building a bigger, brighter, bolder future for the stakeholders.
HUMAN RESOURCE
A fulfilling employee experience results in a highly engaged and productive workforce
that would drive growth and success of the organization. The HR initiatives and practices
implemented by LTIMindtree support the organization's strategy of transforming businesses
and getting them to the future, faster, together.
Your Company offers a comprehensive Employee Value Proposition (EVP) with four key
pillars - Talent-growth Opportunities, People-centric Culture, Rich Employee Experience,
and Compelling Brand. LTIMindtree's approach to wellness is based on four pillars:
Emotional, Physical, Financial and Social. The Company provides a range of initiatives to
support employees' well-being, such as counseling services, medical assistance, elder care
and will & legacy planning.
Your Company has made significant investments in its cross-skilling and up-skilling
platform and Talent Central, which identifies skill gaps and recommends appropriate
training. The Shoshin School provides over 5,000 courses curated by subject matter
experts, covering technical, functional, behavioral, and leadership skill development.
The Company's talent strategy aims to encourage a learning and innovation mindset with
challenging and growth-oriented role-based career paths aligned to the business strategy
and employees' aspirations. Various talent development initiatives form integral part of
an employee's experience, starting from campus hires to lateral recruits and employees
across all levels.
Our HR imperatives focus on building a productive workforce, delivering world-class HR
service & support experience and improving compliance & productivity of HR
operations, which align with the strategic priorities of the organization. For more
details on the organization's employee value proposition, post merger HR integration
journey, Company's talent acquisition strategies, and the strategic initiatives, refer to
the People section in Management Discussion & Analysis forming part of the Integrated
Annual Report.
INFRASTRUCTURE
Your Company occupies overall 6,830,457 sq. ft. of space, consisting of 57,528 seats,
spread across various locations in India, apart from the Kalinga- Training Centre for
1,050 employees measuring about 161,000 sq. ft. and residential facility of around 780
beds.
The Company has prioritized adopting sustainable best practices in accordance with LEED
green building design, for creating and maintaining workplace infrastructure projects.
Significant accolades in FY23
• Green Building LEED Platinum interior certification for ICC Tech Park, Pune and
Adventz Infinity, Kolkata, the new office projects.
• Awarded "Prashansa Patra" at national level from National Safety
Council of India (NSCI) in the service sector. The Company was recognized for exemplary
Occupational Safety & Health (OSH) performance, commitment to reduce workplace
injuries, implementation of the best OSH practices and encouragement of continual
improvements.
• CII National Award for Excellence in Energy Management under the Energy
Efficient Unit category.
• Recognized for efficient energy conservation program and water saving,
offsetting of overall organizational carbon footprint under Excellence in Sustainability
category at the iNFHRA Workplace Excellence Awards 2022.
• Award for the commitment to Occupational Health, Safety, and Environment
(OHS&E Awards) from the World Safety Organization - India, at state level.
QUALITY INITIATIVES
Client Centricity is the core of LTIMindtree's Quality Policy. Your Company strives to
be the most client centric partner by delivering rich and meaningful experiences not only
to its clients but also to the client's customers. The Company endeavors to continuously
improve its services and solutions, with focus on agility and creativity by nurturing an
environment that promotes learning and growth.
Your Company's endeavor to be unmatched in client centricity including its real time,
transparent, yet forward-thinking response, amid the unprecedented challenges, was
acknowledged and appreciated in the recently concluded CSAT survey. Your Company has held
on to the CSAT Experience Index score compared to the previous cycle. Positive feedbacks
have been received on agility/flexibility, understanding business domain and customer
centricity expectations.
LTIMindtree's QMS portal is one single focal point for processes, and it helps to bring
in standardization, institutionalization, and industry best practices/standards and
frameworks.
The QMS is built on the concept of practitioner defined and refined where knowledge and
best practices are shared and published. Process are developed based on industry trends,
different project types and different services that LTIMindtree caters to and make them
available as reference documents for projects to start work and also ensure that the
repository built, is the collection of best practices.
LTIMindtree's proprietary Capability Maturity Framework (LTIMindtree-CMF) was deployed
in FY23 for the fifth consecutive year. It continued to instill a culture of
self-discipline combined with strong collaboration, within and across units. Prime
benefits include increase in earnings via 103 innovation platforms (56 platforms are new),
frameworks, governance & analytics tools, industrialization of existing Intellectual
Property and best practices. Project management using High Maturity (HM) practices also
brought in significant savings. Other benefits included productivity improvements in 47
accounts/sub practices and enrichment of the Central Knowledge Repository (myKM) with good
practices, case studies and reusable components from all units. LTIMindtree's Quality
Management Systems (QMS) was strengthened with 70+ QMS process enhancements, including
estimations and baselines for new technology, new processes, and enhancements for Oracle
OCI/JDE, Data & Analytics, Industrial Internet Of Things (IIOT), Customer Success,
SAP, Digital Engineering and Cloud & Infra Practice. BGenie - the Company's
proprietary liferay-based tool, automating the benchmarking process, completed more than
two thousand baselines across various technologies and project types.
Launched IT service management training course
Service Management Center of Excellence (COE) is established to further enhance service
quality through focused consultancy. It is enabled by Information Technology
Infrastructure Library (ITIL) Assessment framework (to assess effectiveness of ITIL
process implementation) and ITIL four foundation training and certification module. IT
service management training course was designed and implemented across the organization.
The course is curated based on latest and best practices which covers the fundamental
concepts on service management. The implementation included content and assessment
creation, digitization, launch on Learning Management System (LMS) platform, awareness
creation throughout the organization, awarding certificates and competency improvement
using digital governance. Compounded Monthly Growth Rate (CMGR) stood at 69%, based on
pull mechanism.
Launched Manual Error Control program
Manual Error Control (MEC) program is designed by Application Management Services
(AMS), Center of Excellence (CoE) to create awareness across the organization to
pro-actively control manual errors in operations. This framework has review gates designed
to reduce human errors, including major incidents. This helps improve service availability
and thereby enhance client satisfaction. The program is digitalized using Insight360.
Governance is digitized by providing more than 35 KPIs in one view. The analytics on
organization risks have helped business to avoid client escalations. Analytics on client
feedback has helped improve client satisfaction. Support data analytics helps to get
nudges and prescriptive analytics on client ticket data, thereby enabling business to
focus on specific improvements.
The Company's Escalation Risk Review (ERR) framework with escalation path right up to
the Chief Operating Officer was very effective in timely attention at the appropriate
level, thus arresting possible client escalations and ensuring a positive client
experience at every stage during the engagements.
Analytics solution, 'Democratization of Data Analytics through automation' was selected
in top 5 in the Watts Humphrey Awards 2022.
Certifications
The Company continues to demonstrate the ability to drive its Quality, Service
Management, Information Security, Business Continuity Management, Environmental &
Health commitments effectively and efficiently through its ISO 9001, ISO 20000, ISO 27001,
ISO 27701, ISO 22301, ISO 14001 and ISO 45001 certification accreditations by Bureau
Veritas. Compliance to ISAE 3402 for projects in the insurance domain and for client
specific engagements in other domains across all Delivery Units were sustained.
LTIMindtree is SOC 2 Type II attested for India and international delivery centers, thus
demonstrating higher confidence to customers/clients on the focus and dedication towards
security compliance, assurance and governance. The Company continues to retain its Level 5
status on the CMMI DEV & CMMI SVC Ver 2.0 constellations.
DIVIDEND
A. Dividend - FY23
During FY23, the Company paid an interim dividend of RS.20/- per equity share of face
value of RS.1/- each. Further, the Board of Directors has recommended final dividend of
Rs.40/- per equity share of face value of RS.1/- each. Accordingly, the total dividend for
FY23, including the recommended final dividend, if approved by the members at their
ensuing 27th Annual General Meeting (AGM), would amount to Rs.60/- per equity
share of face value of RS.1/- each. The final dividend, if approved by the members, would
be paid to those members whose name appear in the Register of Members as on the Record
Date mentioned in the Notice convening the AGM.
The dividend payment is based on the parameters outlined in the Dividend Distribution
Policy of the Company which is in accordance with Regulation 43A of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations').
The said Policy is hosted on the website of the Company
https://www.ltimindtree.com/wp-content/uploads/2017/05/Dividend-Distribution-Policv.
pdf?pdf=download
B. Unclaimed Dividend
In accordance with the provisions of Section 125 of the Act read the with the Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016 ('IEPF Rules'), following dividends declared by the Company & Mindtree and
remaining unclaimed for seven years will be transferred to the Investor Education and
Protection Fund (IEPF) during FY24 -
Date of declaration |
Dividend declared by |
Due date for transfer to IEPF |
March 23, 2016 |
Mindtree |
April 28, 2023 |
May 31,2016 |
LTIMindtree |
July 6, 2023 |
July 19, 2016 |
Mindtree |
August 24, 2023 |
October 21, 2016 |
Mindtree |
November 26, 2023 |
November 9, 2016 |
LTIMindtree |
December 15, 2023 |
January 19, 2017 |
Mindtree |
February 24, 2024 |
Further, the shares in the folios/demat accounts in which dividend(s) have remained
unclaimed for seven consecutive years will also be transferred to IEPF.
Members are requested to claim dividend(s) which have remained unclaimed, by sending a
request to the Company at e-mail Investor@ltimindtree.com or to the Company's
Registrar and Share Transfer Agent (RTA) at e-mail rnt.helpdesk@linkintime.co.in or
to their postal address C-101, 247 Park, L.B.S. Marg, Vikhroli West, Mumbai-400 083,
Maharashtra, India.
During the year under review, the Company transferred dividend amounting to
Rs.8,49,920/- which remained unclaimed for a period of seven years to IEPF in accordance
with the provisions of the Act. Details of the unclaimed dividend are uploaded on the
Company's website https://www.ltimindtree.com/investors/dividend/
Pursuant to the applicable provisions of the Act, read with the IEPF Rules, the Company
has so far transferred 40,410 equity shares to IEPF on which dividend has not been claimed
for seven consecutive years.
DETAILS OF UNCLAIMED SHARES
In terms of the requirements under Regulation 39 of the SEBI Listing Regulations,
details of unclaimed shares held in demat accounts titled 'Demat Suspense Account' and
'Escrow Demat Account' form part of Annexure A to this report.
CHANGES IN SHARE CAPITAL
During the year under review, your Company allotted its 120,417,607 equity shares of
RS.1/- each to the shareholders of Mindtree, as per the Share Exchange Ratio enshrined in
the Scheme.
Further, 135,016 equity shares of RS.1/- each of the Company were allotted during FY23
on exercise of the vested stock options by the eligible employees under 'LTIMindtree
Limited Employee Stock Option Scheme 2015'.
Accordingly, the paid-up equity share capital of the Company increased from RS.175.27
Mn as at March 31, 2022, to RS.295.82 Mn as at March 31, 2023.
CAPITAL EXPENDITURE
As at March 31, 2023, on consolidated basis, the gross fixed and intangible assets
stood at Rs.44,473 Mn (previous year Rs.40,038 Mn), out of which assets amounting to
Rs.4,953 Mn (previous year Rs.5,735 Mn) were added during the year, and the net fixed and
intangible assets stood at RS.12,360 Mn (previous year RS.11,973 Mn).
As at March 31, 2023, on standalone basis, gross fixed and intangible assets stood at
Rs.35,281 Mn (previous year Rs.31,244 Mn), out of which assets amounting to Rs.4,746 Mn
(previous year Rs.5,396 Mn) were added during the year, and the net fixed and intangible
assets stood at RS.10,852 Mn (previous year RS.10,057 Mn).
LIQUIDITY
Your Company maintains sufficient cash to meet its operations and strategic objectives.
Cash and investments (net of short-term borrowings) have increased from Rs.71,123 Mn as at
March 31, 2022 to Rs.73,721 Mn as at March 31, 2023.
CREDIT RATING
Your Company has been rated by CRISIL, a credit rating agency for its banking
facilities. It has issued long-term issuer rating with AAA/Stable. It has also rated your
Company's short-term facilities with A1+. These ratings reflect your Company's continued
strong parentage, credit profile, liquidity position, strong corporate governance
practices, financial flexibility and conservative financial policies.
DEPOSITS
During the year under review, the Company did not accept any public deposit and as
such, no amount on account of principal and/or interest on public deposit was outstanding
as on the date of the Balance Sheet. Further, in accordance with the provisions of Rule 16
of the Companies (Acceptance of Deposits) Rules, 2014, the Company has filed with the
Registrar of Companies, the return of particulars of transactions by the Company not
considered as deposit.
SUBSIDIARY/ASSOCIATE/JOINT VENTURE COMPANIES
During the year under review, consequent upon the Scheme coming into effect, all the
branches and subsidiary [Mindtree Software (Shanghai) Co. Limited] of Mindtree became
branches and subsidiaries of your Company. As at March 31, 2023, the Company had 26
subsidiaries.
The material changes in the subsidiaries of the Company during FY23, are as under:
A. Change of Name
Consequent to the change of name of your Company to 'LTIMindtree Limited', name of the
subsidiaries are/being changed, to reflect the new name of the Company.
B. Amalgamation
Members may refer to the para titled 'Amalgamation and Arrangement' of this report for
details of an on-going scheme of amalgamation of three subsidiaries with the Company.
C. Liquidation
Following subsidiaries have been liquidated -
i. Ruletronics Limited, UK, wholly owned subsidiary was liquidated w.e.f. May 10, 2022;
ii. Ruletronics Systems Inc., wholly owned subsidiary was liquidated w.e.f. February
16, 2023.
I n line with the requirements of Regulation 16(1)(c) of the SEBI Listing Regulations,
the Company has a policy on identification of material subsidiaries, which is available on
the Company's website,
https://www.ltimindtree.com/wp-content/uploads/2018/11/Material-Subsidiary- Policy.pdf.
As at March 31, 2023, there is no material subsidiary of the Company.
A statement containing salient features of the financial statements of subsidiaries in
Form AOC-1 is annexed as Annexure B to this Report. Pursuant to the requirements of
Section 136 of the Act, the Standalone and Consolidated financial statements along with
relevant documents and audited financial statements of the subsidiaries are hosted on the
Company's website https://www.ltimindtree.com/wp-content/
uploads/2023/06/Subsidiary-Annual-Report-for-FY-23.pdf.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED
Details of investments made and/or loans or guarantees given and/or security provided,
if any are given in the notes to the Standalone and Consolidated financial statements
which form part of the Integrated Annual Report.
RELATED PARTY TRANSACTIONS
During the year under review, all related party transactions were in the ordinary
course of business of the Company and on arm's length terms. During FY23, Audit Committee
has reviewed on quarterly basis, the related party transactions of the Company vis-a-vis
the omnibus approval(s) accorded by Audit Committee.
During FY23, there was no material related party transaction, including transaction
involving payment made to related party with respect to brand usage/royalty, requiring
approval of the shareholders. Furthermore, there was no contract/arrangement with related
parties referred to in subsection (1) of Section 188 of the Act.
Related party transactions during FY23 are in compliance with the Act, SEBI Listing
Regulations and Accounting Standards of Institute of Chartered Accountants of India
(ICAI), and are disclosed in the notes to the financial statements which form part of this
Integrated Annual Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY,
BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
There are no material changes and commitments affecting the financial position of the
Company between the end of the financial year and date of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as per Section 134 of the Act read with Rule 8(3) of the Companies
(Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign
exchange earnings and outgo is given in Annexure C to this Report.
RISK MANAGEMENT
The Company has formulated a risk management policy and put in place a mechanism to
apprise the Board on risk assessment, minimization procedures and periodic review to
ensure that executive management controls risk by means of a properly designed framework.
A detailed note is given in the Risk Management section forming part of the Integrated
Annual Report.
CYBER SECURITY
At LTIMindtree, information security is of paramount importance. In the endeavour to
maintain a robust cyber security posture, your Company has remained abreast of emerging
cyber security events globally, so as to achieve higher compliance and continuity.
State-of-the-art cyber security solutions have been deployed to detect and prevent
malicious attempts, and partnerships with leading cyber security providers are in place
for adequate service and support. While employees functioned effectively as a remote and
hybrid workforce, the Company continued to remain vigilant in the face of changing cyber
security threats. Your Company continues to be certified against the Information Security
Management System (ISMS) Standard ISO 27001:2013 and Privacy Information Management
Systems (PIMS) Standard ISO27701. In addition, the Company has been attested in SSAE18
SOC1 and SOC2 by an independent audit firm.
CORPORATE SUSTAINABILITY
At LTIMindtree, we consider sustainability as an integral and non-negotiable element
that is ingrained in our DNA. Sustainability enables us to foster a nurturing eco-system
and drives our mission for green technology and innovation which gives everyone a chance
to grow by creating harmony between nature, humans, and corporate operations. Our dual
focus strategy on growth and sustainability is the most effective means of building
long-term value for all stakeholders.
Our sustainability framework which is composed of three pillars - Ecological
Sustainability, Workplace Sustainability and Governance & Advocacy - is strengthened
by a set of policies, disclosure mechanisms, management systems and tracking mechanisms
for impacts.
Our ESG 2030 vision and roadmap reflect our commitment in making LTIMindtree an
environmentally, socially and ethically responsible organization with a safe, equal and
inclusive workplace for our multi-ethnicity and diverse talent including our LGBTQ+
community.
Both LTI and Mindtree received accolades, recognitions and validation for their
sustainability performance in several ways, including leadership category in CDP ratings,
good performance in MSCI, ESGRisk.ai, CRISIL, IIFL and FTSE4Good, excellence in workplace
in the form of Great Place to Work (GPTW), recognition for gender equality through ICAI
International Sustainability Reporting Awards. The legacy continues in a positive way at
LTIMindtree, with our bold ambition to become net-zero by 2040 and water-neutral by 2030
for the India operations, strengthening our commitment for sustainable growth and
propelling the Company towards the future, faster - together.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The disclosures required to be given under Section 135 of the Act read with Rule 8(1)
of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Companies
(Corporate Social Responsibility Policy) Amendment Rules, 2021, are provided in the Annual
Report on CSR Activities for FY23, forming part of the Report as Annexure D.
The CSR Policy and CSR Annual Action Plan for FY23 are available on the Company's
website, www.ltimindtree.com/social-responsibility/
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Appointments during FY23
a. Mr. Vinayak Chatterjee was appointed as Independent Director for a term of five
years w.e.f. April 01, 2022;
b. Mr. Debashis Chatterjee was appointed as Chief Executive Officer & Managing
Director w.e.f. November 14, 2022;
c. Mr. Venugopal Lambu was appointed as Whole-time Director & President, Markets II
w.e.f. November 14, 2022;
d. Ms. Apurva Purohit, Mr. Bijou Kurien, and Mr. Chandrasekaran Ramakrishnan were
appointed as Independent Directors for a term of five years w.e.f. November 14, 2022;
e. Mr. Vinit Ajit Teredesai was appointed as Chief Financial Officer w.e.f. November
14, 2022;
In terms of Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014, in the opinion of
the Board, all appointments of Independent Directors during the year under review were
made after due veracity of their integrity, expertise and experience (including their
proficiency).
Cessations during FY23
a. Mr. Sudip Banerjee ceased to hold office as Director, upon completion of his first
term as Independent Director w.e.f. May 19, 2022;
b. Mr. Sanjay Jalona resigned as Chief Executive Officer & Managing Director w.e.f.
June 03, 2022;
c. Ms. Aruna Sundararajan resigned as Independent Director w.e.f. November 14, 2022,
pursuant to the Scheme coming into effect and the need to re-constitute the Board. Ms.
Aruna Sundararajan has confirmed that there are no other material reasons other than those
provided in her letter dated November 14, 2022, which was furnished to stock exchanges;
d. Mr. Anil Rander resigned as Chief Financial Officer w.e.f. November 14., 2022, and
e. Mr. Venugopal Lambu resigned as Whole-time Director & President-Markets II
w.e.f. January 10, 2023;
The Board places on record its appreciation for the services rendered by Mr. Sudip
Banerjee, Mr. Sanjay Jalona, Ms. Aruna Sundararajan and Mr. Venugopal Lambu during their
tenure as Director and Mr. Anil Rander as Chief Financial Officer
Re-appointment of Directors
Mr. A.M. Naik (DIN: 00001514) and Mr. Sudhir Chaturvedi (DIN: 07180115) Directors,
retire by rotation, and being eligible, have offered themselves for re-appointment at the
27th AGM. Mr. A.M. Naik has expressed desire to relinquish office of Chairman
on conclusion of the Annual General Meeting to be held in the calendar year 2024.
The disclosures under Section 102 of the Act, Regulation 36(3) of the SEBI Listing
Regulations and Secretarial Standard-2 on General Meetings issued by the Institute of
Company Secretaries of India form part of the notice convening the 27th AGM.
CORPORATE GOVERNANCE REPORT
The Corporate Governance Report is annexed as Annexure E to this Report.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met 8 (eight) times during the year under review. Details of
these Board meetings are provided in the Corporate Governance Report which is Annexure
E to this Report. The gap between two board meetings was within the time prescribed
under the Act and the SEBI
Listing Regulations.
During FY23, Independent Directors had their separate meeting on April 5, 2022 in
accordance with the requirements of Schedule IV of the Act, Secretarial Standard-1 on
Board Meetings issued by the Institute of Company Secretaries of India and the SEBI
Listing Regulations.
Further, a meeting of the Independent Directors was held on April 20, 2023 to discuss, inter-alia,
annual performance evaluation of the Board, its Committees and the individual Directors
for FY23 and assessment of flow of information from management to the Board
BOARD COMMITTEES
In terms of the requirements of the SEBI Listing Regulations, the Board has constituted
Audit Committee, Stakeholders' Relationship Committee, Nomination & Remuneration
Committee, Corporate Social Responsibility Committee and Risk Management Committee. The
Board has also constituted Strategic Investment Committee. Details of each of these
committees outlining their composition, terms of reference and meetings held during FY23,
are outlined in the Corporate Governance Report forming part of this Report as Annexure
E.
During FY23, recommendations made by the Committees to the Board of Directors were
accepted by the Board, after due deliberations.
COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Policy ('NRC Policy') is in place laying down the role
of Nomination and Remuneration Committee (NRC), criteria of appointment, qualifications,
term/tenure etc. of Executive Directors & Independent Directors, annual performance
evaluation, remuneration of Executive Directors, Non-Executive/Independent Directors, Key
Managerial Personnel & Senior Management, and criteria to determine qualifications,
positive attributes & independence of Director. During the year under review, the NRC
policy was amended to reflect the new name of the Company and harmonise the practices for
appointment and remuneration of Senior Management Personnel of the merged entity.
The amended NRC policy is available on the Company's website at https://www.ltimindtree.com/wp-content/uploads/2019/05/LTI-Final
NRC-Policv. pdf?pdf=download
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration of independence from all the Independent Directors
as stipulated under Section 149(7) of the Act and Regulation 16(1 )(b) of the SEBI Listing
Regulations, confirming that they meet the criteria of independence, which has been duly
assessed by the Board as part of their annual performance evaluation. Further, in terms of
Regulation 25(8) of the SEBI Listing Regulations, Independent Directors have confirmed
that they are not aware of any circumstances or situations, which exist or may be
reasonably anticipated, that could impair or impact their ability to discharge their
duties with an objective independent judgement and without any external influence.
The Independent Directors have confirmed that they have complied with the Code for
Independent Directors prescribed in Schedule IV to the Act.
ANNUAL RETURN
The annual return for FY23 is available on the Company's website, https://www.ltimindtree.com/wp-content/uploads/2023/06/Annual-Return-
Form-MGT-7-FY2022-23.pdf
INTERNAL CONTROL SYSTEMS AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company has an Internal Control System in accordance with Section 134(5)(e) of the
Act, commensurate with the size, scale and complexity of its operations. The Audit
Committee comprising of professionally qualified Directors, interacts with the auditor,
internal auditors and the management in dealing with matters within its terms of
reference.
The Company has a proper and adequate system of internal controls. These controls
ensure transactions are authorized, 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 within the meaning of the Act. An extensive program of
internal audits and management reviews supplement the process of internal financial
control framework. Documented policies, guidelines and procedures are in place for
effective management of internal financial controls.
The internal financial control framework design ensures that financial and other
records are reliable for preparing financial and other statements. In addition, the
Company has identified and documented the key risks and controls for each process that has
a relationship to the financial operations and reporting. At regular intervals, internal
teams test the identified key controls. The Internal auditors also perform an independent
check of effectiveness of key controls in identified areas of internal financial control
reporting. The Statutory Auditors' Report include a report on the internal financial
controls over financial reporting.
In order to maintain objectivity and independence, Internal Auditor reports to the
Chairperson of Audit Committee of the Board. The Audit Committee defines the scope and
authority of the Internal Auditor. Internal Auditor monitors and evaluates the efficacy
and adequacy of internal control systems in the Company, its compliance with the operating
systems, accounting procedures and policies at all locations of the Company and its
subsidiaries. Based on the report of Internal Auditor, process owners undertake corrective
action in their respective areas and thereby strengthen the controls. Significant audit
observations and necessary corrective actions are presented to the Audit Committee
The Audit Committee and the Board are of the opinion that the Company has sound
Internal Financial Control commensurate with the nature and size of its business
operations and operating effectively, and no material weakness exists during FY23
COMPLIANCE MONITORING SYSTEM
At LTIMindtree, ensuring regulatory compliance is of utmost importance. Your Company
has put in place a compliance management framework which outlines the Company's philosophy
towards compliance culture, understanding compliances, coverage, approach,
responsibilities, reporting matrix and trainings.
The Company believes that good framework to track statutory compliance is essential for
the successful conduct of business operations and high standards of corporate governance.
The Company has further enhanced the mechanism to monitor compliances by setting up the
'Compliance Committee' ('CC') which monitors the regulatory compliance performance,
remediation plans for non-conformities, on an ongoing basis Periodic updates on regulatory
compliance performance along with status of remediation plan is also reviewed by Risk
Operating Committee Key compliances/ regulations are covered as part of internal audit
every year Company maintains list of applicable laws and compliance checklist(s) which are
monitored and tracked through the in-house compliance tool
The Company also engages external consultants to review and update the compliance
requirements for new geographies and update the existing checklist(s) of compliances.
Compliance tasks are mapped in compliance tool to process owners who update the status
with supporting evidence. Identified key stakeholders across functions ensure and confirm
compliance with the provisions of all applicable laws on a continuous basis. The Global
Compliance update is placed before the Audit Committee on quarterly basis and the Audit
Committee gives update to the Board
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act, your Directors state that:
(i) in the preparation of the annual accounts, the applicable accounting standards have
been followed and there has been no material departure;
(ii) the 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 and of the profit of the Company for the
year ended March 31, 2023;
(iii) the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down an adequate system of internal financial controls to
be followed by the Company and such internal financial controls are adequate and operating
effectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively
ANNUAL PERFORMANCE EVALUATION OF BOARD OF DIRECTORS
The annual evaluation of the performance of the Board for FY23 was carried out with the
help of an external agency with due compliance of the provisions of the Act and Regulation
17(10) of the SEBI Listing Regulations. Online evaluation of the Board, Board Committees,
Chairman and individual Directors was carried out in line with the Guidance Note on Board
Evaluation issued by SEBI.
The evaluation of the performance of the Board, its Committees, Chairman &
Directors and suggestion emanating out of the performance evaluation exercise were
reviewed by the Independent Directors at their separate meeting and Nomination &
Remuneration Committee & Board of Directors at their respective meetings.
Individual members of the Board were evaluated against the skills/expertise/
competencies identified and approved by the Board of Directors as are required in the
context of Company's business which, inter-alia, include competence/ expertise in areas
of:
• Strategy and Planning
• Governance, Risk Management and Compliance
• Finance, Accounts & Audit
• Global experience / international exposure
• Contributor and Collaborator
• Information Technology
• Client Engagement
• Stakeholders Engagement and Industry Advocacy.
The evaluation indicates that the Board of Directors has an optimal mix of
skills/expertise to function effectively. The mapping of board skills/expertise vis-a-vis
individual Directors is outlined in the Report on Corporate Governance Report which is Annexure
E to this Report.
DISCLOSURE OF REMUNERATION
The information under Section 197(12) of the Act and Rule 5(1) of the Companies
(Appointment & Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure
F to this Report.
Details of employees' remuneration under Rule 5(2) & 5(3) of the Companies
(Appointment & Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure
G to this Report. In terms of the second proviso to Section 136(1) of the Act and the
rules made thereunder, the Board's Report is being sent to the members without the
aforesaid Annexure. Members who are interested in obtaining copy of the same may send an
email at Investor@ltimindtree.com.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors state that the Company has complied with the Secretarial Standards
issued by the Institute of Company Secretaries of India on Meetings of the Board of
Directors (SS-1) and General Meetings (SS-2).
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company is committed to creating a safe and healthy work environment, where every
employee is treated with respect and is able to work without fear of discrimination,
prejudice, gender bias or any form of harassment at the workplace. LTIMindtree has in
place a Prevention of Sexual Harassment (POSH) Policy in accordance with the requirements
of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 and the Rules thereunder. The essence of the policy is communicated to all
employees at regular intervals through assimilation and awareness programs. Following are
some of the programs and initiatives in place to train the employees and the Internal
Committees (IC) for POSH:
1. Each employee is required to undergo a mandatory e-learning module on 'Prevention of
Sexual Harassment at Workplace'.
2. IC Members are imparted relevant training by an external agency during quarterly
meetings of the IC.
3. The POSH policy is available on the intranet portal for employees to refer as
required.
4. Penal consequences of sexual harassment and constitution of the IC are displayed on
the notice boards at all LTIMindtree offices.
Your Company has set up IC, both at the corporate office and at every location where it
operates in India. The IC at each location has a fair representation of men and women,
including senior women employees as Presiding Officers and external members who are women.
During FY23, the Company received nine complaints (aggregate number of cases reported
in Mindtree and the Company) of sexual harassment in India. Eight of these complaints have
been resolved with appropriate action, with one complaint pending at the end of FY23.
MODERN SLAVERY STATEMENT
Your Company has published the Modern Slavery Statement prepared in accordance with
Section 16 (Mandatory criteria for modern slavery statements) of the Modern Slavery Act
2018 of Australia and pursuant to Section 54 of the Modern Slavery Act 2015 of United
Kingdom (UK) which was approved by the Board. Modern Slavery Statement, UK has been hosted
on the website of the Company pursuant to Section 54 of the Modern Slavery Act of UK.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT ('BRSR')
Pursuant to Regulation 34 of the SEBI Listing Regulations, 'Business Responsibility and
Sustainability Report' forms part of this Integrated Annual Report. The report outlines
the initiatives taken by the Company from the environmental, social and governance
perspective.
INTEGRATED REPORTING
In the endeavour to enhance the quality of disclosures, an Integrated Report ('IR')
encompassing financial and non-financial information forms part of the Integrated Annual
Report.
LTIMindtree was one of the early adopters of IR in the IT industry. Our IR is set out
in accordance with the integrated reporting framework outlined by International Integrated
Reporting Council and SEBI's circular on Integrated Reporting. Our IR has integrated
thinking embedded in our strategic framework and our integrated business model defines our
ability to create long-term value (outputs and outcomes) out of the capitals available to
us (input) with value-accretive activities operating under the strong-governance
framework. Our IR aids all the key stakeholders to get a holistic and long-term view of
the Company's strategic focus areas, future outlook and value creation which revolves
around the six capitals - Financial, Manufactured, Intellectual, Human, Social &
Relationship and Natural.
EMPLOYEE STOCK OPTION SCHEMES
The 'LTIMindtree Employee Stock Option Scheme 2015', 'LTIMindtree Employees Stock
Option Plan 2021' and 'LTIMindtree Employee Restricted Stock Purchase Plan 2012' ('ESOP
Schemes') are in place to attract and retain talent. There is no material change in the
ESOP Schemes during the financial year under review, save and except change of their name
consequent upon the Scheme coming into effect. The ESOP Schemes are in compliance with the
Act and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the
disclosures relating to the ESOP Schemes as required under the abovementioned SEBI
Regulations are available on the Company's website,
https://www.ltimindtree.com/investors/annual-reports/
The certificate of Secretarial Auditor confirming compliance of the ESOP Schemes with
the Act and abovementioned SEBI Regulations is given in Annexure H to this Report.
CEO & CFO CERTIFICATE
In accordance with the provisions of Regulation 17(8) of the SEBI Listing Regulations,
certificate of Chief Executive Officer & Managing Director and Chief Financial Officer
in relation to the Financial Statements for the year ended March 31, 2023, is Annexure
- 1 to the Corporate Governance Report.
WHISTLE BLOWER MECHANISM
LTIMindtree's Whistleblower Policy meets the requirement of the vigil mechanism
framework prescribed under the Act and the SEBI Listing Regulations. The Whistleblower
Policy is available on the Company's website,
https://www.ltimindtree.com/wp-content/uploads/2023/02/Whistle- Blower-Policy.pdf.
The Policy aims to provide an appropriate platform and protection to whistleblowers to
report instances of any actual or suspected incidents of unethical practices, violation of
applicable laws and regulations including without limitation the Integrity Code, Code of
Conduct for Prevention of Insider Trading, Code of Fair Practices and Disclosure. The
Policy also provides for adequate safeguards against victimization of the whistleblower.
LTIMindtree investigates complaints speedily, confidentially and in an impartial manner,
and takes appropriate action to ensure that the requisite standards of professional and
ethical conduct are maintained. All employees and directors have access to Chairperson of
the Audit Committee. The Audit Committee reviews on a quarterly basis, the complaints
received under the vigil mechanism.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
During the year under review, there were no significant and material orders passed by
regulators, courts or tribunals impacting the going concern status and the Company's
operations in future.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements pursuant to Section 129(3) of the Act prepared in
accordance with the Accounting Standards prescribed by the ICAI, forms part of this
Integrated Annual Report.
AUDITORS
A. STATUTORY AUDITOR
M/s. Deloitte Haskins & Sells Chartered Accountants LLP [ICAI Registration No.
117364W/W100739] were appointed as Statutory Auditor of the Company by the members at
their 26th AGM, for a period of 5 years from conclusion of the 26th
AGM till conclusion of the 31st AGM.
The reports issued by the Statutory Auditor on the standalone and consolidated
financial statements of the Company for the year ended March 31, 2023 do not contain any
qualification, observation or comment or remark(s) which have adverse effect on the
functioning of the Company and therefore, do not call for any comments from Directors.
Further, the Statutory Auditor has not reported any fraud as specified under Section
143(12) of the Act.
B. SECRETARIAL AUDITOR
The Secretarial Audit Report issued by M/s. Alwyn Jay & Co., Practising Company
Secretaries is annexed as Annexure I to this Report. The Secretarial Auditor's
Report to the members does not contain any qualification or reservation which has any
material adverse effect on the functioning of the Company.
COST RECORDS AND AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under Section
148 of the Act are not applicable to the business activities carried out by the Company.
OTHER DISCLOSURES
I. Remuneration received by Whole-time Director from subsidiary company: During the
year under review, no Whole-time Director received remuneration from any of the
subsidiary(ies) of the Company.
II. During the year, no corporate insolvency resolution process was initiated under the
Insolvency and Bankruptcy Code, 2016, either by or against the Company, before NCLT or
other court(s).
AWARDS & RECOGNITIONS
Corporate/ Marketing awards:
1. Named the GSI Global Delivery Platform Partner of the Year by Snowflake, the Data
Cloud Company, in accelerating migrations and implementations on the Snowflake Data Cloud
at speed and scale.
2. Won multiple accolades at the Institutional Investor 2022 Rest of Asia ex-Mainland
China Executive Team rankings -Ranked amongst the top 3 across all sell-side categories in
the Technology/IT Services & Software space. The Company was also recognized in the
'Most-Honored' Companies Asia List 2022.
3. Ranked among the top 5 players in the latest IT sourcing study for the Nordic region
by Whitelane Research and PA Consulting.
4. Certified as a water-positive company based on a third-party audit.
5. Won Golden Peacock Award for Risk Management 2022 in the IT services and consulting
category.
6. Recognized as Great Place to Work Certified in Poland.
7. Won the Golden Peacock Award for Risk Management 2021 for business excellence and
maturity in enterprise risk management.
8. Won the Business World People HR Diversity and Inclusion Award for outstanding
Diversity and Inclusion initiatives.
9. Won two Brandon Hall Group Human Capital Management Excellence Awards 2022 for best
social talent acquisition strategy and best advance
in managing a remote workforce.
10. Certified as a Great Place to Work? in India for the second consecutive year for
building a High-Trust, High-Performance Culture™.
11. Named by Great Place to Work? Institute as one of India's Best Workplaces™
for Women for the second consecutive year.
12. Honored with the Women in Sustainability Award at the ESG World Summit and GRIT
Awards 2022 in Singapore.
13. Recognized For Most Innovative Practices at the DivHERsity Awards 2023.
14. Won the Silver shield towards Excellence in Integrated Reporting in the
service-sector category for FY22 from "The Institute of Chartered Accountants of
India" that was presented during "ICAI Sustainability Reporting Awards
2021-22".
15. LTIMindtree's Canvas named winner in the year 2023 Artificial Intelligence
Excellence Awards.
16. Scored "A-" and is Named Global 'Supplier Engagement Leader' 2022 by
Carbon Disclosure Project (CDP).
17. Recognized as One of the Best Firm for Women in Tech at Analytics India Magazine's
Rising 2023 Conference.
18. Awarded Elite Consulting Partner Status in the Databricks Partner Program.
19. LTIMindtree's GeoSpatial NxT won the 2022 IoT Excellence Award for excellence in
innovation.
20. Accolades and Honour from Sustainability Reporting Standards Board of ICAI for
facilitating the SEBI-ICAI Business Responsibility & Sustainability Reporting
Back-Testing initiative during FY-23.
21. Winner of the Best Annual Report Award for FY-22 amongst companies in the ITES
Sector received from The Free Press Journal and Grant Thornton.
Analyst and Advisory recognitions:
1. LTI & Mindtree received an honorable mention in the 2022 Gartner? Magic
Quadrant for Public Cloud IT Transformation Services, worldwide.
2. Recognized in 2022 Gartner? Magic Quadrant™ for Oracle Cloud Application
Services, Worldwide.
3. Mindtree named as a 'Leader' in ISG Provider Lens™ Google Cloud Partner
Ecosystem 2022.
4. LTI named as a 'Leader' and 'Star Performer' in Everest Group's Application and
Digital Services in P&C Insurance PEAK Matrix Assessment 2023.
5. Mindtree named as a 'Major Contender' in Everest Group's Adobe Services Providers
PEAK Matrix Assessment 2022.
6. LTI recognized in 2022 Gartner? Magic Quadrant™ for SAP S/4HANA Application
Services, Worldwide.
7. Mindtree named as a 'Major Contender' in Everest Group's Industry 4.0 Services PEAK
Matrix Assessment 2022.
8. LTI named as a 'Major Contender' and 'Star Performer' in Everest Group's Open
Finance IT Services PEAK Matrix? Assessment 2023.
9. Mindtree named as a 'Major Contender' in Everest Group's Healthcare Provider Digital
Services 2022 PEAK Matrix Assessment 2022.
10. LTIMindtree recognized in The Forrester Customer Analytics Services Providers
Landscape, Q1 2023.
11. LTIMindtree named as a 'Major Contender' in Everest Group's Digital Transformation
Consulting PEAK Matrix? Assessment 2023.
12. LTIMindtree recognized in The Forrester Salesforce Consulting Services Providers
Landscape, Q1 2023.
13. LTIMindtree recognized in The Forrester Augmented Business Intelligence Landscape
2023 Report.
OTHER MATTERS
Inspection was carried out by the office of Regional Director (South Eastern Region),
Ministry of Corporate Affairs under Section 206 of the Act in relation to Mindtree, during
the financial year 2019-20. Show cause/adjudication notice(s) were issued by Registrar of
Companies, Karnataka (RoC) during the financial year 2022-23 pertaining to alleged
violation of Sections 149(9), Sections 230-232 read with Section 234, Section 134 and
Section 143 of the Act. Mindtree had filed application(s) for compounding of the alleged
violations. The application(s) for compounding are pending for hearing/disposal.
ACKNOWLEDGEMENTS
Your Directors place on record their sincere thanks to the customers, vendors,
investors, banks, financial & academic institutions, regulatory authorities, stock
exchanges and all other stakeholders for their continued co-operation and support.
Your Directors also acknowledge the support and co-operation from the Government of
India, state governments and overseas government(s), their agencies and other regulatory
authorities.
Your Directors also appreciate the commendable efforts, teamwork and professionalism of
the employees of the Company.
|
For and on behalf of the Board |
|
|
Debashis Chatterjee |
Nachiket Deshpande |
Date: April 27, 2023 |
Chief Executive Officer & Managing Director |
Chief Operating Officer & Whole-time Director |
Place: Mumbai |
(DIN: 00823966) |
(DIN: 08385028) |
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