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).
|(Rs. in Mn)
Revenue from operations
Employee benefit expense
Depreciation and amortization expenses
Profit before tax
Profit for the year
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 Honble 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.
With the merger of LTI and Mindtree, LTIMindtree is proud to have entered the elite league of top-tiered IT services companies. Your Companys 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 Companys 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.
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 organizations 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. LTIMindtrees 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 Companys 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 employees 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 organizations employee value proposition, post merger HR integration journey, Companys talent acquisition strategies, and the strategic initiatives, refer to the People section in Management Discussion & Analysis forming part of the Integrated Annual Report.
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.
Client Centricity is the core of LTIMindtrees 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 clients 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 Companys 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.
LTIMindtrees 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.
LTIMindtrees 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. LTIMindtrees 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 Companys 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 Companys 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.
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.
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
April 28, 2023
July 6, 2023
July 19, 2016
August 24, 2023
October 21, 2016
November 26, 2023
November 9, 2016
December 15, 2023
January 19, 2017
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 Companys Registrar and Share Transfer Agent (RTA) at e-mail firstname.lastname@example.org 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 Companys 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.
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).
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.
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 Companys short-term facilities with A1+. These ratings reflect your Companys continued strong parentage, credit profile, liquidity position, strong corporate governance practices, financial flexibility and conservative financial policies.
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.
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.
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 Companys 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 Companys 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 arms 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.
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.
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.
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 Companys 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
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
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.
COMPANYS POLICY ON DIRECTORS 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 Companys 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.
The annual return for FY23 is available on the Companys 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 Companys 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 Companys 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 Boards 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.
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 SEBIs 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 Companys 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 Companys 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
LTIMindtrees 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 Companys 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 Companys 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.
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 Auditors 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.
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 Indias 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. LTIMindtrees 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 Magazines Rising 2023 Conference.
18. Awarded Elite Consulting Partner Status in the Databricks Partner Program.
19. LTIMindtrees 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 Groups Application and Digital Services in P&C Insurance PEAK Matrix Assessment 2023.
5. Mindtree named as a Major Contender in Everest Groups 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 Groups Industry 4.0 Services PEAK Matrix Assessment 2022.
8. LTI named as a Major Contender and Star Performer in Everest Groups Open Finance IT Services PEAK Matrix? Assessment 2023.
9. Mindtree named as a Major Contender in Everest Groups 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 Groups 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.
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.
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
Date: April 27, 2023
Chief Executive Officer & Managing Director
Chief Operating Officer & Whole-time Director