The Board's policy is to regularly have separate meetings with independent directors to update them on all business-related issues and new initiatives. In such meetings, the executive directors and other members of the senior management make presentations on relevant issues.
In addition, our independent directors meet periodically in an executive session, that is without the Chairperson, or any of the executive directors, or the Management.
There have been no materially significant related party transactions, monetary transactions or relationships between the Company and directors, the Management, subsidiary or relatives, except for those disclosed in the financial statements for the year ended March 31, 2010.
Currently, the Board has five committees : audit committee, compensation committee, nominations committee, investor grievance committee and risk management committee. All committees consist entirely of independent directors.
The Board, in consultation with the nominations committee, is responsible for constituting, assigning, co-opting and fixing terms of service for committee members. It delegates these powers to the nominations committee.
The Chairperson of the Board, in consultation with the Company Secretary and the committee chairperson, determines the frequency and duration of the committee meetings. Normally, all the committees meet four times a year. Recommendations of the committees are submitted to the entire Board for approval.
The quorum for meetings is either two members or one-third of the members of the committee, whichever is higher.
During the year, our audit committee (‘the committee’) comprised four independent directors :
Effective April 13, 2010, the committee was reconstituted as follows :
In India, we are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). In the U.S., we are listed on the NASDAQ Global Select. In India, Clause 49 of the Listing Agreement makes it mandatory for listed companies to adopt an appropriate audit committee charter. The Blue Ribbon Committee set up by the SEC, USA recommends that every listed company adopt an audit committee charter. This recommendation has also been adopted by NASDAQ.
In our meeting on May 27, 2000, our committee adopted a charter which meets the requirements of Clause 49 of the Listing Agreement with Indian stock exchanges and the SEC, USA.
The primary objective of the committee is to monitor and provide effective supervision of the Management's financial reporting process with a view to ensuring accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. The committee oversees the work carried out in the financial reporting process by the Management, the internal auditors and the independent auditor, and notes the processes and safeguards employed by each. The committee has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent auditor in accordance with the law. All possible measures must be taken by the committee to ensure the objectivity and independence of the independent auditor.
Four audit committee meetings were held during the year – on April 14, 2009; July 9, 2009; October 8, 2009 and January 11, 2010.
No. of meetings |
||
| Held | Attended | |
| Deepak M. Satwalekar | 4 | 4 |
| Prof. Marti G. Subrahmanyam | 4 | 4 |
| Dr. Omkar Goswami | 4 | 3 |
| Sridar A. Iyengar | 4 | 4 |
During the year, the audit committee held two conference calls on April 6, 2009 and July 4, 2009.
Each member of the committee is an independent director, according to the definition laid down in the audit committee charter, and Clause 49 of the Listing Agreement with the relevant Indian stock exchanges.
The Management is responsible for the Company's internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Company's financial statements in accordance with the generally accepted auditing standards, and for issuing a report thereon. The committee's responsibility is to monitor these processes. The committee is also responsible for overseeing the processes related to the financial reporting and information dissemination. This is to ensure that the financial statements are true, fair, sufficient and credible. In addition, the committee recommends to the Board the appointment of the Company's internal and independent auditors.
In this context, the committee discussed with the Company's auditors the overall scope and plans for the independent audit. The Management represented to the committee that the Company's financial statements were prepared in accordance with GAAP. The committee discussed with the auditors, in the absence of the Management (whenever necessary), the Company's audited financial statements including the auditors' judgments about the quality, not just the applicability, of the accounting principles, the rationality of significant judgments and the clarity of disclosures in the financial statements.
The committee also discussed with the auditors other matters required by the Statement on Auditing Standards No.114 (SAS 114) – The Auditors' Communication With Those Charged With Governance and the Sarbanes-Oxley Act of 2002.
Relying on the review and discussions conducted with the Management and the independent auditors, the audit committee believes that the Company's financial statements are fairly presented in conformity with GAAP in all material aspects.
The committee has also reviewed the internal controls put in place to ensure that the accounts of the Company are properly maintained and that the accounting transactions are in accordance with the prevailing laws and regulations. In conducting such reviews, the committee found no material discrepancy or weakness in the internal control systems of the Company.
The committee also reviewed the financial policies of the Company and expressed its satisfaction with the same.
The Company's auditors provided the committee with the written disclosures required by Independence Standards Board Standard No. 1 – ‘Independence Discussions with Audit Committees’, based on which the committee discussed the auditors' independence with both the Management and the auditors. After review, the committee expressed its satisfaction on the independence of both the internal and the statutory auditors.
Moreover, the committee considered whether any non-audit services provided by the auditors' firm could impair the auditors' independence, and concluded that none of such service provided by the auditors had impaired their independence.
The committee secured compliance on the affirmation of the Board of Directors to the NASDAQ stock exchange, under the relevant rules of the exchange on the composition of the committee and independence of the committee members, disclosures relating to non-independent members, financial literacy and financial expertise of members, and a review of the audit charter.
Based on the committee's discussion with the Management and the auditors and the committee's review of the representations of the Management and the report of the auditors to the committee, the committee has recommended the following to the Board of Directors :
The committee has recommended to the Board the re-appointment of B S R & Co., Chartered Accountants, as the statutory auditors of the Company for the fiscal year ending March 31, 2011, and that the necessary resolutions for appointing them as auditors be placed before the shareholders. The committee has also recommended to the Board the appointment of KPMG, India as independent auditors of the Company for the IFRS financial statements, for the financial year ending March 31, 2011.
The committee recommended the appointment of Singhvi, Dev & Unni as the internal auditors of the Company for the fiscal ending March 31, 2011, to review various operations of the Company, and determined and approved the fees payable to them.
The committee has also issued a letter in line with recommendation No. 9 of the Blue Ribbon Committee on audit committee effectiveness, which is to be provided in the Financial statements prepared in accordance with IFRS. This letter is incorporated in Form 20-F, which is available on our website, www.infosys.com.
In conclusion, the committee is sufficiently satisfied that it has complied with its responsibilities as outlined in the Audit committee charter.
Mumbai |
Sd/- |
During the year, our compensation committee (‘the committee’) comprised four independent directors. They are :
Effective April 13, 2010, the committee was reconstituted as follows :
The purpose of the committee of the Board of Directors (‘the Board’) shall be to discharge the Board's responsibilities related to compensation of the Company's executive directors and senior management. The committee has the overall responsibility of approving and evaluating the compensation plans, policies and programs for executive directors and senior management.
The committee shall annually review and approve for the CEO, the executive directors and senior management (a) the annual base salary, (b) the annual incentive bonus, including the specific goals and amount, (c) equity compensation, (d) employment agreements, severance arrangements, and change in control agreements / provisions, and (e) any other benefits, compensation or arrangements.
The committee, in consultation with the CEO, shall review the performance of all the executive directors each quarter, on the basis of the detailed performance parameters set for each of the executive directors at the beginning of the year. The compensation committee may, from time-to-time, also evaluate the usefulness of such performance parameters, and make necessary amendments.
Five compensation committee meetings were held during the year ended March 31, 2010. These were held on April 14, 2009; June 20, 2009; July 10, 2009; October 9, 2009 and January 12, 2010.
No. of meetings |
||
| Held | Attended | |
| Prof. Marti G. Subrahmanyam | 5 | 5 |
| Prof. Jeffrey S. Lehman | 5 | 5 |
| David L. Boyles | 5 | 5 |
| Claude Smadja | 5 | 5 |
During the year, the compensation committee held two conference calls – on September 4, 2009 and February 24, 2010.
The committee reviewed the performance of all executive directors on a quarterly basis and approved the payment of individual performance incentives to each one of them. The committee believes that the compensation and benefits are adequate to motivate and retain the senior officers of the Company. Apart from the said disclosures, none of the directors had a material beneficial interest in any contract of significance to which the Company or any of its subsidiary undertakings was a party, during the financial year.
Bangalore |
Sd/- |