CORPORATE GOVERNANCE PRACTICES

Rakesh Prasad Gupta (2K12B12)Ravi Kumar Yadav (2K12B14)Rachi Gupta (2K12B50)Afshan Naureen khan (2K12MKT01)Prashant Verma (2K12MKT06)Snigdha Garg (2K12MKT10)

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ABOUT CMC LIMITED

• CMC was incorporated on December 26, 1975, as the 'Computer Maintenance Corporation Private Limited'.

• The Government of India held 100 per cent of the equity share capital. On August 19, 1977, it was converted into a public limited company.

• Renamed as 'CMC Limited', and obtained a fresh certificate of incorporation dated August 27, 1984.

• In 1991, acquired Baton Rouge International Inc. USA (it was subsequently renamed CMC Americas, Inc. in 2003), one of the first cross-border acquisitions by an Indian IT firm.

• The 2001, the government divested 51 per cent of CMC's equity to Tata Sons Ltd, through a strategic sale, and CMC became a part of the Tata group.

AREAS OF OPERATION OF CMC LTD.

• Software and hardware maintenance

• Equipment integration and supply

• Systems and hardware consultancy

• Network management

• Networking solutions / EDI

• Software design and development

• Data-centre services   

• Education and training

• Embedded systems and many more

CORPORATE GOVERNANCE AT CMC

• The Company is in compliance with the requirements of the guidelines on corporate governance stipulated under clause 49 of the Listing Agreements with the stock exchanges.

• In its pursuit of excellence in corporate governance, Company has adopted the Tata Code of Conduct, Tata Business Excellence Model, Tata Code of Conduct for Prevention of Insider Trading & Code of Corporate Disclosure Practices, Whistle Blower Policy and exclusive Code of Conduct for Non-Executive Directors.

• The Company has put in place an Information Security Policy that ensures proper utilization of IT resources.

TATA CODE OF CONDUCT(APPLICABLE TO EXECUTIVE DIRECTOR, SR.

MANAGEMENT, OTHER STAFF MEMBERS)

• As a subsidiary of TCS the company follows TATA Code Of Conduct, “First elucidated in 1998, the Code lays down the ethical standards that Tata employees have to observe in their professional lives, and it defines the value system at the heart of the Tata group and its many business entities.

• The Code has been modified down the years to keep it in step with changing regulatory norms in the different parts of the world that Tata companies now do business.

CODE OF CONDUCT(FOR NON-EXECUTIVE DIRECTORS)

• Non-Executive Directors of a company will always act in the interest of the company and ensure that any other business or personal association which they may have, does not involve any conflict of material interest with the operations of the company and his role therein.

• Non-Executive Directors will comply with all applicable laws and regulations of all the relevant regulatory and other authorities as may be applicable to such Directors in their individual capacities

• Non-Executive Directors will safeguard the confidentiality of all information received by them by virtue of their position.

CMC’S DEFINITION OF GOOD CORPORATE GOVERNANCE

• Good Corporate governance is about enhancing value for all stakeholders with strong emphasis on transparency, accountability, ethics, integrity, equity, fairness and commitment to values.

• Corporate Governance is a journey for constantly improving sustainable value creation and is an upward moving target. Over the years, the governance processes and systems have therefore been strengthened in CMC.

AWARDS AND RECOGNITION

• Company has been recognised by the Institute of Company Secretaries of India (ICSI) as one of the top 7 companies in the country for consistently fostering excellent Corporate Governance Practices across the organization.

• The Company was conferred with ”Certificate of Recognition” for the third consecutive year at the award ceremony of 12th ICSI National Award for Excellence in Corporate Governance - 2012.

SHAREHOLDERS SATISFACTION SURVEY

• During the year under review, the Company has carried out Shareholders Satisfaction Survey through electronic/physical mode on various matters relating to investor services and was rated `VERY GOOD'. The feedback received from the Shareholders was placed before the Shareholders/Investors Grievance Committee.

WHISTLE BLOWER POLICY

• Company has established a mechanism called 'Whistle Blower Policy' for employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy and provides safeguards against victimization of employees who avail the mechanism.

• The policy permits all the employees to report their concerns directly to the Ethics Counsellor/Chairman of the Audit Committee of the Company.

BEST GOVERNANCE PRACTICES FOLLOWED IN CMC LTD.

• All securities related filings with stock exchanges and SEBI are reviewed every quarter by the Shareholders/Investors Grievance Committee of Directors of the Company.

• The Company undergoes internal audit conducted by independent auditors, M/s Ernst & Young.

• The Company also undergoes Secretarial Audit on quarterly basis conducted by an independent company secretary in whole-time practice.

• The Company has implemented Secretarial Standards SS1 on Board Meetings and SS2 on General Meetings recommended by ICSI.

CONTINUED…

• The Company identified and inducted two Independent Directors without any time gap on cessation of two Senior Independent Directors.

• Company carried out Customer, Vendor, Shareholders and Employees Satisfaction Survey to assess the satisfaction level of stakeholders to be able to take corrective measures, if required.

• The Company has Work and Environment (including Sexual Harassment Policy) Policy, Affirmative Action Policy and Diversity and Inclusion Policy to ensure equal treatment to all the employees in the Company.

WIPRO • Wipro Technologies Limited is a giant information technology services

corporation headquartered in Bangalore, India.

• According to the 2008–09 revenue, Wipro is one of the largest IT services company in India and employs more than 112,925 people worldwide as of June 2010

• It has interests varying from information technology, consumer care, lighting, engineering and healthcare businesses. Azim Premji is the Chairman of the board.

• Wipro (an acronym of "Western India Products Limited") started as a vegetable oil trading company in 1947 from an old mill at Amalner, Maharashtra, India founded by Azim Premji's father.

• In 1977, when IBM was asked to leave India, Wipro entered the information technology sector.

• In 1979, Wipro began developing its own computers, and in 1981 started selling the finished product. This was the first in a string of products that would make Wipro one of India's first computer makers. Wipro Technologies hired managers who held their employees to strict performance standards.

• In 1980 Wipro moved into software development and started developing customized software packages for their hardware customers.

• This expanded their IT business and subsequently developed the first Indian 8086 chip. Since 1992 Wipro has begun to grow its roots offshore in United States and by 2000 Wipro Ltd ADRs were listed on the New York Stock Exchange site. The company's revenue grew by 450% from 2002 to 2007.

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Major Divisions• IT Services: Wipro provides complete range of IT Services to

the organization. The range of services extends from Enterprise Application Services (CRM, ERP, e-Procurement and SCM) to e-Business solutions.

• Product Engineering Solutions: Wipro is the largest independent provider of R&D services in the world.

• Technology Infrastructure Service: Wipro's Technology Infrastructure Services (TIS) is the largest Indian IT infrastructure service provider in terms of revenue, people and customers with more than 200 customers in US, Europe, Japan and over 650 customers in India.

• Business Process Outsourcing: Wipro provides business process outsourcing services in areas Finance & Accounting, Procurement, HR Services, Loyalty Services and Knowledge Services.

• Consulting Services: Wipro offers services in Business Consulting, Process Consulting, Quality Consulting, and Technology Consulting.

CORPORATE GOVERNANCE IN WIPRO

• The Spirit of Wipro represents the core values of Wipro.

• The three values encapsulated in the Spirit of Wipro are:-1.Intensity to Win -Make customers successful team,

innovate and excel2.Act with Sensitivity-Respect for the individual

Thoughtful and responsible3.Unyielding Integrity-Delivering on commitments

Honesty and fairness in action 

• This has been articulated through the Company's Code of Business Conduct and Ethics, Corporate Governance guidelines, charters of various sub-committees of the Board and Company's Disclosure policy.

• These policies seek to focus on enhancement of long-term shareholder value without compromising on Ethical Standards ,and Corporate Social Responsibilities.

• These practices form an integral part of the Company's strategic and operating plans.

• Corporate Governance philosophy is put into practice in Wipro through the following four layers, namely,

• Governance by Shareholders,

• Governance by Board of Directors,

• Governance by Sub-committee of Board of Director

• Governance of the management process

Delegation of authority through these sub committees and through the management provides the required clarity and directions to the organization. 

FIRST LAYER: GOVERNANCE BY SHAREHOLDERS

• Annual General Meeting -Annual General meeting for the 2009-10 is scheduled on July 22,2010,

• other AGM of the last three years-held regularly

• Financial Calendar- tentative declared for every year

• Dividend- Board of Directors has recommended a Final Dividend of Rs. 6 per share on equity shares of Rs. 2 each in year 2009-10.

• National ECS facility.

• Awards and Rating-

• The Company has been awarded the highest rating of stake holder Value and Corporate Rating I (called SVG 1) by ICRA Limited, a rating agency in India.

• This rating implies that the Company belongs to the Highest Category on the composite parameters of stakeholder value creation and management as also Corporate Governance practices.

• The Company has been awarded the national award for excellence in Corporate Governance from ICSI during the year 2004.

 

• Shareholders' satisfication Survey -The Company conducted a Shareholders' Satisfaction survey in July 2009 seeking views on various matters relating to investor services.

• About 1900 shareholders participated and responded to the survey.

• The analysis of the responses reflects an average rating of about 3.4 on a scale of 1 to 4. Around 73% of the shareholders indicated that the services rendered by the Company were good/ excellent and were satisfied.

• wipro are constantly in the process of enhancing our service levels to further improve the satisfaction levels based on the feedback received from our shareholders. wipro welcome any suggestions from your end to improve our services further.

•  Means of Communication with Shareholders/Analysis-wipro have established procedures to disseminate, in a planned manner, relevant information to our shareholders, analysts, employees and the society at large.

• Audit Committee reviews the earnings press releases, SEC filings and annual and quarterly reports of the Company, before they are presented to the Board of Directors for their approval for release.

•  Quarterly results: Our quarterly results ate published in widely circulated national newspapers

• Website: The Company's website contains a separate dedicated section "Investor" where shareholders information is available. The Annual report of the Company, earnings press releases, SEC filings and quarterly reports of the Company are also available on the website in a user-friendly and downloadable form .

• Annual Report: Annual Report containing audited accounts, CFA together with Directors' report, Auditors' report and other important information arc circulated to members and others  

• Listing on Stock Exchanges, Stock Codes, International Securities Identification Number (ISIN) and Cusip Number for ADR

• Registrar and Transfer Agents-

• The power of share transfer and related operations have been delegated to Registrar and Share Transfer Agents Karvy Computers hare Private Limited, Hyderabad.

• Share Transfer System- 

• The turnaround time for completion of transfer of shares in physical form is generally less than 7 days from the date of receipt, if the documents are clearDescription of Voting rights

• Distribution of Shareholding and categories of Shareholders as per Clause 35 of the Listing Agreement ON March 31, 2010 INDICATED IN ANNUAL REPORT

• Shareholding Pattern as of March 31, 2010 under Clause 35 of the Listing Agreement STATED IN ANNUAL REPORT

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SECOND LAYER: GOVERNANCE BY THE BOARD OF DIRECTORS

• As on March 31, 2012, company had

• seven non-executive Directors,

• four executive Directors of which one executive Director is also the Chairman of our Board.

• All the seven non-executive directors are independent directors i.e. independent of management and free from any business or other relationship that could materially influence their judgment.

• All the independent directors satisfy the criteria of independence as defined under listing agreement with Indian Stock Exchanges and New York Stock Exchange Corporate Governance standards.

• Information flow to the board members

• Company submitted information to the Board for their review, inputs and approval. Likewise, quarterly financial statements are first presented to the Audit Committee and subsequently to the Board of Directors for their approval.

• Board Meetings-

• Declare in consultation with Board Governance & Nomination Committee and all our directors, considering the practices of earlier years. Once approved by the Board Governance & nomination Committee,

• the schedule of the Board meeting and Board Committee meetings is communicated in advance to the Directors to enable them to schedule their meetings.

• Post-meeting follow-up system-After the hoard meetings, we have a formal system of follow up, review and reporting on actions taken by the management on the decisions of the Board and sub-committees of the Board.

•  Disclosure of materially significant related party transaction -During the year 2009- 1 0, no transactions of material nature had been entered into by the Company with the Management or their relatives that may have a potential conflict with interest of the Company.  

• Whistle Blower policy and affirmation that no personnel has been denied access to the Audit, risk and compliance Committee

• The Company has adopted an Ombuds process

•  Company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement.

• Lead independent director-The Board of Directors of the Company have designated Mr. N Vaghul as the Lead independent Director. The role of the Lead Independent Director is described in the Corporate Governance guidelines of Company  

THIRD LAYER: GOVERNANCE BY THE SUB COMMITTEE OF THE BOARD OF DIRECTORS

• Board has constituted sub-committees to focus on specific areas and make informed decisions within the authority delegated to each of the Committees. Each Committee of the Board is guided by its Charter, which defines the scope, powers and composition of the Committee. All decisions and recommendations of the Committees are placed before the Board either for information or approval.

• Company have four sub-committees of the Board as at March 31,2010.

• Audit/Risk and Compliance Committee

• Board Governance and Nomination Committee

• Compensation Committee

• Administrative/Shareholders' Grievance Committee

AUDIT/RISK AND COMPLIANCE COMMITTEE

• The Audit/Risk and Compliance Committee of the Board of Directors, which was formed in 1987

• This Committee was renamed as Audit/Risk and Compliance Committee with effect from April 22, 2009. The primarily responsibilities are;• Auditing and accounting matters, including recommending the

appointment of our independent auditors to the shareholders• Compliance with legal and statutory requirement• Integrity of the Company's financial statements, discussing with the

independent auditors the scope of the annual audits, and fees to be paid to the independent auditors

• Performance of the Company's Internal Audit function, Independent Auditors and accounting practices

•  Review of related party transactions, functioning of Whistle Blower mechanism, and

• Implementation of the applicable provisions of the Sarbanes Oxley Act 2002 including review on the progress of internal control mechanism to prepare for certification under Section 404 of the Sarbanes Oxley Act 2002.

BOARD GOVERNANCE AND NOMINATION COMMITTEE 

• In April, 2009 the Board governance and Nomination Committee was split into two separate committees and reconstituted as• (a) Board Governance and Nomination Committee• (b) Compensation Committee

• After this reconstitution, the members of the Board Governance and Nomination Committee are as follows;• Dr. Ashok Ganguly - Chairman• Mr. N. Vaghlrl, Mt. P. M. Sinha and Mr. Bill Owens - Members.

• All members of the Board Governance and Nomination Committee are independent non-executive directors.

The primary responsibilities of Committee are;• Develop and recommend to the Board Corporate Governance

Guidelines applicable to the company.• Evaluation of the Board on a continuing basis including an

assessment of the effectiveness of the full board, operations of the Board Committees and Contributions of Individuals directors.

• Lay down policies and procedures to asses the requirement, for inclusion of new members on the Board.

• Implementing policies and processes relating to corporate governance principles.

• Ensuring that appropriate procedures are in place to access Board membership needs and Board effectiveness.

• Reviewing the Company's policies that relate to matters of CSR including of public issue of significance to the company and its stake holders.

• Formulating the disclosure Policy, its review and approval of disclosure.

FOURTH LAYER: GOVERNANCE OF THE MANAGEMENT PROCESS

• Corporate Executive Council of the Company (CEC)

• The day-to-day management is vested with the CEC of the Company comprising of Business and Functional heads who work under the overall superintendence and control of the Board. The CEC is headed by the Chairman , Mr. Aziz H Premji.

• Code of Business Conduct and Ethics:-

• In 1983, company articulated 'Wipro Beliefs' consisting of six statements,

• At the core of beliefs was integrity articulated as

• individual and Company relationship should be governed by the highest standard of conduct and integrity. Over years, this articulation has evolved in form bur remained constant in substance.

• company, the Board of Directors and employees have a responsibility to understand and follow the Code of Business Conduct. All employees are expected to perform their work with honesty and integrity.

• Wipro's Code of Business Conduct reflects general principles to guide employees in making ethical decisions. This code is also applicable to our representatives,

• The Code outlines fundamental ethical considerations as well as specific considerations that need to be maintained for professional conduct. This Code has been displayed on the Company's website. www.wipro.com/investors.

• compliance to Code of Business Conduct and Ethics (COBC) is monitored through:

• employees are annually required to go through the training and awareness modules created on COBC and understand the principles of each of the Policies briefed under COBC

• Randomly selected employees are tested on the compliance effectiveness of the Policies covered under COBC; this primarily enables the Company to analyze the gaps and create Training/awareness modules to address the same.

• Annually group discussions are held with select employees to understand the grey areas in compliance to further refine the code.

• The Chairman has affirmed to the Board of Directors that this Code of Business Conduct and Ethics has been complied by the Board members and Senior Management. 

• Ombudsman process

• Company adopted an Ombudsmen process which is the channel for receiving and redressing employees' complaints. Encourage employees to report any reporting of fraudulent financial or other information to the stakeholders, any conduct that results in violation of the Company's Code of Business Conduct and Ethics, to management (on an anonymous basis, if employees so desire).

• Mechanism followed under Ombudsmen process is appropriately communicated within the Company across all levels and has been displayed on Wipro's intranet and on Wipro's website .