Report on Corporate Governance:
Satyam Computer Services Limited ('Mahindra Satyam') defines its stakeholders as its Customers, Associates, Investors and the Society. At the core of the Company's philosophy lies its focus on customer centricity and the goal of ensuring stakeholder delight at all times, through innovations in new products and services and improving business processes, fulfilling the role of a responsible service provider committed to best practices. In order to realize this vision and become a global top-tier consulting and technology services company, the Company understands that it needs to achieve industry leading benchmarks in corporate governance, delivery excellence and employee satisfaction.
As a customer centric organization, it believes that it can co-innovate with customer to create reusable industry solutions with emerging technologies. This aligned to customer needs with industry native solutions and better consulting - led approach is expected to consequentially result in futuristic delivery models.
The Board is responsible for setting the strategic objectives for the management and ensuring that stakeholders' long-term interests are served. The Management in turn is responsible for establishing and implementing policies, procedures and systems to enhance the long-term value of the Company and delight all its stakeholders.
The Company is established to be the front runner of the social inclusivity charter in the IT landscape with increasing activities to benefit our ecosystem with keen focus on environment sustainability along with a constant endeavor to improve lives.
The Mahindra Satyam vision
We will Rise™ to be among the top 3 leaders in each of our chosen market segments while fostering innovation and inclusion.
We will consistently achieve top quartile growth by contributing to our customers' success, by enabling our employees to realize their potential and by creating value for all our stakeholders.
The constitution of Audit Committee is in compliance to the applicable provisions of Companies Act, 1956 and Listing Agreement with stock exchanges.
The functions of Audit Committee include:
1. Oversight of the Company's financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
3. Approval of engagement and payment to statutory auditors for any other non-audit services rendered by the statutory auditors.
4. Reviewing with the management, the quarterly / yearly financial statements before submission to the Board for approval.
5. Reviewing with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.
6. Reviewing and approval of the internal audit scope and plan.
7. Reviewing adequacy of internal audit function including structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.
Meetings were held on May 22, August 09, November 09, 2011 and January 31, 2012.
The Compensation Committee was constituted of Independent and Non-executive Directors.
The Committee evaluates compensation and benefits for Executive Directors and frames policies and systems for Associate Stock Option Plans.
Meeting was held on May 23, 2011.
Details of remuneration to Directors:
1. No remuneration was paid by the Company to Executive Directors viz., Mr. Vineet Nayyar, Chairman and Mr. C.P. Gurnani, Whole-time Director & CEO.
2. No Stock Options were granted to Directors during financial year 2011-12.
3. Except Mr. Ulhas N Yargop, Non-executive Director, who is holding two shares of the Company, no other Director of the Company is holding any shares of the Company.
4. The Board of Directors had approved for payment of commission not exceeding Rs. 12.00 lakhs each (Rupees Twelve lakhs only), to the Non-executive Directors payable in proportion to their term of directorships for the financial years 2009-10 and 2010-11. Since there were no profits for financial year 2009-10 and 2010-11, the Company had applied to Central Government and is awaiting for its approval.
Investors' Grievance Committee
(1) The Investors' Grievance Committee focuses on shareholders' grievances and strengthening of investor relations, specifically looking into redressal of grievances pertaining to:
i) Transfer of shares
ii) Dematerialisation / Rematerialisation of shares
iii) Replacement of lost / stolen / mutilated share certificates
iv) Non-receipt of rights / bonus / split share certificates
v) Non-receipt of notices / documents / Annual reports
vii) Other related issues
(2) Meetings were held on May 23, 2011 and February 01, 2012.
(3) Name and designation of compliance officer: Mr. G. Jayaraman, Company Secretary
(4) Details of investor complaints received and resolved during the year 2011-12:
(5) Members may contact the Secretarial Circle of the Company for their queries, if any, at: +91 40 3063 6363 / 3067 5022 and Fax: +91 40 2311 7011.
Investment Committee was constituted with an objective to assist the Board in reviewing investment policies, strategies, transactions and to ensure that the Company's investments are in accordance with sound and acceptable business practices and applicable rules and regulations.
Meeting was held on January 04, 2012.
The materially significant related party transactions were disclosed in the Note 50 of Standalone financial statements for the year ended March 31, 2012.
There has been no non-compliance other than those mentioned in the Note 32 forming part of financial statements. No penalties or strictures imposed on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter relating to capital markets during the last three years.
Pursuant to sub-clause VII of clause 49 of the listing agreement, the Company confirms that it has complied with all the mandatory requirements prescribed. The following non-mandatory requirements are adopted:
1. Compensation Committee
2. Whistle Blower policy
The Company has adopted the Whistle Blower policy and affirms that no personnel have been denied access to the Audit Committee.
On March 21, 2012, the Board approved the proposed Scheme of Amalgamation and Arrangement of the Company with Tech Mahindra Limited. The details of the proposed Scheme were discussed in the Director's Report.
Means of communication
The quarterly, half-yearly and annual financial results are generally published in Financial Express (a national daily) and in Andhra Prabha (a vernacular [Telugu] daily).
The Annual Report and the financial results are also displayed on the Company's website www.mahindrasatyam.com
The official press releases of the Company are sent through facsimile to the Stock Exchanges where the Company's shares are listed and released to wire services and the press for information of the public at large and also posted on the Company's website.
General Shareholder's information
a. The AGM of the Company will be held on Friday, September 07, 2012 at 10.30 A.M. at Sri Sathya Sai Nigamagamam (Kalyana Mandapam), 8-3-987 / 2, Srinagar Colony, Hyderabad - 500 073.
b. The Financial Year of the Company is from April 01 to March 31.
c. Dates of book closure for AGM: September 05 to September 07, 2012 (both days inclusive)
d. Registered office: Mahindra Satyam Infocity, Unit - 12, Plot No. 35 / 36, Hi-tech City layout, Survey No. 64, Madhapur, Hyderabad - 500 081, A.P. Phone: (91-40) 3063 6363 / 3067 5022 Fax: (91-40) 2311 7011
Web site: www.mahindrasatyam.com
e. Listing details:
1. BSE Ltd., Phiroze Jeejeebhoy Towers, Dalal Street,Mumbai - 400 001
2. The National Stock Exchange of India Limited, Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051
1. National Securities Depository Ltd. (NSDL)
2. Central Depository Services (India) Limited (CDSL)
ISIN / CUSIP*: INE275A01028
American Depository Shares (ADS)#
Stock Exchanges: OTC Markets USA# 304, Hudson Street, 2nd Floor, New York, NY 10 013
Depositories: Citibank N.A., New York
ISIN / CUSIP*: 804098101
*ISIN - International Securities Identification Number; CUSIP- Committee on Uniform Securities Identification Procedures.
# On August 9, 2011, Company has entered into a Letter Agreement with Citibank New York for termination of Depository Agreement and necessary filings have been made with SEC. The trading of ADSs in Pink OTC markets was stopped on March 12, 2012 and the ADSs were cancelled on March 16, 2012. As per the Depositary Agreement, the Depositary sold the underlying shares of balance ADSs in the Indian stock exchanges and distributed the proceeds.
The Securities and Exchange Commission, USA, vide its order dated March 29, 2012, had revoked registration of Company's ADS.
f. Listing fee for the financial year 2012-13 has been paid to all the Indian Stock Exchanges, where the shares of the Company are listed.
g. Stock Code:
1) BSE Code: 500376
2) NSE Code: SATYAMCOMP
3) Reuters Code: SATY.BO (BSE); SATY.NS (NSE)
4) Bloomberg: SCS IN
5) ADS Symbol (OTC): SAYCY (upto March 12, 2012)
h. The Company has in-house facilities for share transfers. The members may contact for the redressal of share transfer related grievances to the Company Secretary, Satyam Computer Services Limited, Mahindra Satyam Infocity, Unit - 12, Plot No. 35 / 36, Hi-tech City layout, Survey No. 64, Madhapur, Hyderabad - 500 081, A.P. Phone: (91-40) 3063 6363 / 3067 5022, Fax: (91-40) 2311 701 1, e-mail: firstname.lastname@example.org.
i. The Company's shares are covered under the compulsory dematerialization list and are transferable through the depository system. As per the internal quality standards, the Company has established processes for physical share transfers.
j. Dematerialization of shares: The Company has the necessary infrastructure in-house for dematerialization of shares. As per the internal norms, shares received for dematerialization are generally confirmed within a period of three working days from the date of receipt of the valid documents. As on March 31, 2012, 99.54 percent of outstanding shares of the Company are held in electronic form.
k. The Company has earmarked 1,300,000 equity shares of 10/- each fully paid up under ASOP-A administered through Satyam Associate Trust in 1998-99. The warrants outstanding as at March 31, 2012 are Nil.
The Company has earmarked 58,146,872 equity shares under the Associate Stock Option Plan (ASOP) - B, 3,456,383 ADSs under ASOP - ADS and 13,000,000 equity shares under ASOP - RSUs and ASOP - RSUs (ADS).
The Scheme wise outstanding options as at March 31, 2012 are given below:
i. ASOP - B - 20,269,437 options
ii. ASOP - RSUs - 5,60,185 options
Pursuant to the de-registration of company's ADSs from the Securities and Exchange Commission, USA, (SEC), both the ADS linked stock option plans were terminated. While the RSU ADS option holders were offered cash compensation for extinguishing their rights under the ASOP RSU ADS Scheme, ASOP-ADS option holders, upon their eligibility, were offered equity linked options under ASOP-B plan based on a valuation exercise carried out by an independent consultancy firm.
The vesting period and exercise period for the stock options shall be determined by the Compensation Committee, subject to the minimum vesting period being one year.
l. The addresses of global offices of the Company are given elsewhere in this report.
m. Address for correspondence:
Satyam Computer Services Limited, Mahindra Satyam Infocity, Unit - 12, Plot No. 35 / 36, Hi-tech City layout, Survey No. 64, Madhapur, Hyderabad - 500 081, A.P. Phone: (91-40) 30636363 / 3067 5022, Fax: (91-40) 2311 7011.
n. Other useful information to shareholders:
i. Pursuant to provisions of Section 205A of the Companies Act, 1956, the dividend declared by the Company which remains unclaimed for a period of seven years, shall be transferred to Investor Education & Protection Fund (IEPF) established by the Central Government under Section 205C of the said Act.
ii. The dividend for the financial years up to 2003-04 and the interim dividend for the financial year 2004-05 which remained unclaimed have been transferred by the Company to IEPF.
iii. The due dates for transfer of unclaimed dividends to IEPF, pertaining to different financial years are given below. Members, who have not claimed the dividend for these periods are requested to lodge their claim with the Company. Subsequent to the transfer to IEPF, no claim shall be entertained for such unclaimed dividends.
iv. Shares received for physical transfer are generally registered within a period of twenty five days from the date of receipt of valid documents. In case no response is received from the Company within 30 days of lodgement of transfer request, the transferee may write to the Company with full details so that necessary action could be taken to safeguard the interest of the concerned against any possible loss / interception during postal transit.
v. Members holding shares in physical form are requested to notify to the Company, any change in their registered address and bank account details promptly by written request under the signatures of sole / first joint holder. Members holding shares in electronic form are requested to send their instructions regarding change of name, change of address, bank details, nomination, power of attorney, etc., directly to their Depository Participant (DP) as the same are maintained by them.
vi. Non-resident members are advised to immediately notify to the Company or to the DPs as the case may be:
a. change in their residential status on return to India for permanent settlement;
b. particulars of their NRE bank account with a bank in India, if not furnished earlier;
vii. In case of loss / misplacement of shares, a complaint shall be lodged by the claimant with the police station, and intimation to this effect shall be sent to the Company along with original or certified copy of FIR / acknowledgment of the complaint
viii. For expeditious transfer of shares, shareholders should fill in complete and correct particulars in the transfer deed. Wherever applicable, the registration number of the power of attorney should also be quoted in the transfer deed at the appropriate place.
ix. Equity shares of the Company are under compulsory demat trading by all investors. Considering the advantages of scrip-less trading, members are encouraged to consider dematerialization of their shareholding.
x. Members are requested to quote their folio / DP and client ID nos., as the case may be, in all correspondence with the Company to its address given in para 'o' above.
xi. Members who have multiple folios in identical name(s) are requested to apply for consolidation of such folio(s) and send the relevant share certificates to the Company.
xii. Section 109A of the Companies Act, 1956 extends nomination facility to individuals holding shares in physical form in companies. Members, in particular those holding shares in single name may avail of this facility by furnishing the particulars of their nominations in the prescribed nomination form.
xiii. Ministry of Corporate Affairs issued circulars dated April 21, 2011 and April 29, 2011 permitting the Companies to send the notices / documents including annual reports through email to the shareholders who have registered their email address in this regard. Members are encouraged to support this nationwide Green Initiative by registering their email addresses with the depository participants or the Company as applicable for receiving the notices and other documents from the Company.
xiv. Members are welcome to give us their valuable suggestions for improvement of investor services.