Company's Philosophy on Corporate Governance

ROLTA adheres to good corporate practices and is constantly striving to better them and adopt emerging best practices. It is believed that adherence to business ethics and commitment to corporate social responsibility would help the Company achieve its goal of maximizing value for all its stakeholders. The Company is committed to good corporate governance and continuously reviews various investor relationship measures with a view to enhance stakeholders' value. The Company has adopted a Code of Conduct for top three-tier of management including the Whole-time Directors and the Managing Director. The Company's Corporate Governance policy has been further strengthened through the Rolta Directors and Designated Employees Code of Conduct for Prevention of Insider Trading which is in line with the amended Securities and Exchange Board of India (SEBI) Regulations in this regard. The Company provides detailed information on various issues concerning the Company's business and financial performance.

Rolta has complied in all material respects with the features of Corporate Governance as specified in the revised guidelines Clause 49 of the Listing Agreement.

1 Board of Directors

(i) Composition of the Board

The Board of Directors of the Company includes individuals who are professionals in their respective areas of specialization and who have held eminent positions. The Board is broad based and comprises of individuals drawn from management, technical, financial and legal fields The members of the Board are individuals with leadership qualities and strategic insight. The current policy of the Company is to have an Executive Chairman who is also the Managing Director. Directors including Non-executive Directors are professionally competent. At present, the Board consists of eleven members, of which six are Non-Executive Independent Directors. None of the Directors on the Board of Rolta India Ltd. is a director in more than ten listed companies, member of more than ten committees and Chairman of more than five committees, across all the Companies in which they are Director. The Board's role, functions, responsibilities and accountability are clearly defined.

The Board has access to all strategic information within the Company. Regular updates provided to the Board inter alia, include:

Quarterly results of our operating divisions or business segments.

Annual, Mid-Term and Long-Term operating plans and budgets and any updates.

Minutes of meetings of audit, compensation,investor grievance and management committees.

General notices of interest received from directors .

Dividend data.

Information on recruitment and remuneration of senior officers one level below the Board level, including appointment or removal of Officer of the Company.

Materially important litigations, show cause, demand, prosecution and penalty notices. Any materially relevant defaults in financial obligations.

Details of joint ventures, acquisitions of companies or collaboration agreements. Any significant development on the human resources aspect.

Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company.

Sale of material nature of investments, subsidiaries and assets, which are not in the normal course of business.

Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.

Details of foreign risk exposure and the steps taken by the management to limit risks of adverse exchange rate movement.

Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as non-payment of dividend, etc.

(ii) Board Meetings:

Five Board Meetings were held last year with a minimum of one meeting in each Quarter. The Board Meetings of the Company are pre-scheduled and adequate notice is given to the members of the Board. Apart from the Quarterly Board Meetings, the Company convenes additional Board Meetings if required by giving appropriate notice to the Directors to consider specific matters related to the business of the Company. The Board Meetings are generally held at the Registered Office of the Company at Rolta Tower A, Rolta Technology Park, MIDC-Marol, Andheri (East), Mumbai - 400093, India.

For effective corporate management, the Board has constituted various Committees viz. Management Committee which meets every month, Audit Committee quarterly, Compensation Committee thrice in a year and Investors' Grievance Committee also twice in a year.

During the financial year 2011-12, the Board of the Company, as also the various specialised committees constituted by the Board, held as many as 26 meetings, which include 5 meetings of the Board. Information as required to be given in terms of Annexure 1A to Clause 49 of the Listing Agreement, was placed before the Board for its consideration and all matters with explanatory notes / reports relating to the respective committees were circulated to the committee members before the meetings.

The Directors, including the Non-executive Directors, actively participated at length in the deliberations of the Board. During the financial year 2011-12, the Board held its meetings on 11th August 2011, 1st November 2011, 28th November 2011, 3rd February 2012 and 7th May, 2012. The time gap between any two Board meetings did not exceed four months.

2. Management Committee

The Management Committee is a Committee of the Board and is authorised to deliberate, act and decide on all matters, which the full Board is otherwise empowered to do, except those matters, which are specifically required by law to be considered and decided by full Board. The Management Committee meets monthly to deliberate and take decisions on various issues relating to strategic, financial, corporate and legal matters ensuring smooth management of the Company.

The Management Committee comprises three Whole-time Directors (including the Chairman) and two non-executive and independent Directors, namely Mr. K. K. Singh, Mr. A. D. Tayal, Mr. Hiranya Ashar, Mr. R.R. Kumar and Mr. K. R. Modi. Mr. K. K. Singh is the Chairman of the Management Committee. The Company Secretary acts as the Secretary to the Management Committee. The minutes of the Management Committee and other Committee meetings are placed before the Board for its information and ratification at the immediate following Board meeting.

3. Investors' Grievance Committee

The Board of Directors of the Company, has formed an Investors' Grievance Committee comprising of two Non-Executive and two Whole-time Directors. The Investors' Grievances Committee is chaired by Mr. K. R. Modi and its other members include Mr. R. R. Kumar, Mr. A. D. Tayal and Mr. Hiranya Ashar. Mr. Dharmesh Desai, the Company Secretary and the Compliance Officer under Clause 49 of the Listing Agreement, also acts as the Secretary of the Investors' Grievance Committee.

This Committee's mandate requires it to look into investors' grievances relating to matters such as the transfer of shares, non receipt of Annual Reports and non-receipt of dividends, and also reviews any cases filed by aggrieved investors before the courts or other forums. It also supervises the Company's in-house Investor Service Cell, which services the shareholders of the Company by monitoring, recording and processing share transfers and requests for dematerialization of shares.

M/s Link Intime India Pvt. Ltd. as its Registrar & Share Transfer Agent have been appointed w.e.f. 1st February, 2011. The transfers received by the Company/ Registrar & Share Transfer Agent are generally processed and transferred within 15 days from the date of receipt if the documents are complete in all respects. No valid transfer request remains pending for transfer to the transferees as on 30th June 2012. All requests for dematerialization of shares are likewise processed and confirmation thereof is normally communicated to the concerned depository within 10 working days of receipt of all documents.

The Committee monitors the Redressal of Investor Grievances. The total number of complaints received and replied to the satisfaction of the shareholders during the year under review was 44. The complaints received from regulatory authorities and pending as on June 30, 2012 were as follows:

There are 17 complaints as per records of the Securities and Exchange Board of India. Out of these 17, 3 have been resolved by the Company, 5 are subjudiced and pending for Court Orders in which company is only a formal party, 3 are intra party disputes brought to the notice of the Company and the shareholders have not responded to the request of the Company to comply with formalities or furnished information / documents as required by the Company in spite of reminders having been sent to them, 6 pertains to issue of duplicate shares and investor have not complied with the procedure for issue of duplicate shares.

No complaints as received from Bombay Stock Exchange Ltd (BSE), and National Stock Exchange of India Ltd (NSE) remained pending for resolution as on June 30, 2012.

4. Audit Committee

The Company's Audit Committee was formed in compliance with Clause 49 of the Listing Agreement with the Indian Stock Exchanges as read with Section 292A of the Companies Act, 1956. Presently the Audit Committee consists of three independent and non-executive Directors, namely, Mr. R. R. Kumar (as Audit Committee Chairman), Mr. K. R. Modi and Mr. V. K. Chopra and one Whole-time Director Mr. Hiranya Ashar.

Mr. R. R. Kumar was the former Chairman & Managing Director of Union Bank of India and has sound knowledge in the areas of Finance, Banking and Accounts. Mr. K. R. Modi another member of the Audit Committee has deep knowledge in law. Mr. V. K. Chopra is a Fellow Member of The Institute of Chartered Accountants of India. He has held various top positions during his 39 years of experience in Banks; including 3 years as Chairman & Managing Director in Corporation Bank, Mangalore & SIDBI, Delhi / Lucknow; 3 years as Executive Director in Oriental Bank of Commerce. He retired as Whole Time Member in SEBI, after serving for about a year. He has deep knowledge of Banking & Finance. Mr. Hiranya Ashar is Director Finance & Chief Financial Officer of the Company and has sound knowledge in the areas of Finance, Banking and Accounts.

The Company held four Audit Committee meetings for the review of Quarterly financial results relating to the period July 1, 2011 to June 30, 2012. These meetings were attended by all the Committee members. The Committee invited the Auditors to be present at each of these meetings. The Company Secretary acts as the Secretary of the Audit Committee.

The Audit Committee also advises the management on the areas where in internal audit process can be strengthened. The minutes of the meetings of the Audit Committee are circulated to the members of the Committee and placed before the Board.

Terms of Reference:

The terms of reference/powers of the Audit Committee have been specified by the Board of Directors and includes all aspects specified under Clause 49 of the listing agreement, as under:  

A. The primary objective of the Audit Committee is to monitor and provide effective supervision of the management's financial reporting process with a view to ensure accurate, timely and proper disclosures and 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 reviews the processes and safeguards employed by each.

B. The role of the Audit Committee includes the following:

1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2. Recommending to the Board, the appointment, reappointment and, if required, the replacement or removal of Statutory Auditors and fixation of audit fees.

3. Approval of payment to Statutory Auditors for services rendered by the Statutory Auditors.

4. Reviewing with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

• Matters required to be incorporated in the Directors' Responsibility Statement forming part of the Directors' Report in terms of sub-section (2AA) of Section 217 of the Companies Act, 1956.

• Changes, if any, in accounting policies and practices and reasons for the same.

• Major accounting entries involving estimates based on the exercise of judgment by the Management.

• Significant adjustments made in the financial statements arising out of audit findings.

• Compliance with listing and other legal requirements relating to financial statements.

• Disclosure of related party transactions.

• Qualifications in draft audit report.

5. Reviewing with the management, the quarterly financial statements before submission to the Board for approval.

6. Reviewing with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.) the statement of funds utilized for purposes other than those stated in the offer document / prospectus/ notice and the report submitted by the agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendation to the Board to take needed steps in the matter.

7. Reviewing with the management, the performance of Statutory and Internal Auditors, and adequacy of internal control systems.

8. Reviewing the adequacy of internal audit functions, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.

9. Discussion with internal Auditors of any significant findings and follow-up thereon.

10. Reviewing the findings of any internal investigations by the internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

11. Discussion with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

12. Looking into the reasons for substantial defaults in the payment to the shareholders (in case of non payment of declared dividends) and creditors.

13. Carrying out such other function as may be specifically referred to the Committee, by the Board of Directors and/or other Committee of Directors of the Company.

14. Reviewing the following information:

• The management discussion and analysis of financial condition and results of operations;

• Statement of significant related party transactions (as defined by the Audit Committee), submitted by Management;

• Management letters/letters of internal control weaknesses issued by the Statutory Auditors;

• Internal audit reports relating to internal control weaknesses; and

• The appointment, removal and terms of remuneration of internal Auditors.

15. The Audit Committee's powers, include the following:

• To investigate any activity within its terms of reference.

• To seek information from any employee.

• To obtain outside legal or other professional advice.

• To secure attendance of outsiders with relevant expertise, if it considers necessary

5. Compensation Committee:

The Company's Board has set up a competent and qualified Compensation Committee in compliance with the SEBI guidelines. As on 30th June 2012, its members include Mr. Kamal K. Singh (as Compensation Committee Chairman), Mr. R. R. Kumar, Mr. V. K. Agarwala and Mr. K. R. Modi. The Committee is responsible for grant of ESOPs recommending the compensation structure for Whole-time Directors, approving yearly merit increases and the implementation and administration of the Employee Stock Option Plans.

The Non-Executive Directors of the Company are paid sitting fees at the rate of Rs. 20,000/- for attending each Board Meeting and ^10,000/- for attending each Board Committee Meeting. Presently, the Non-executive Directors of the Company are not paid commission.

The Compensation Committee held three meetings during the period July 1, 2011 to June 30, 2012.

6. Code for Prevention of Insider Trading/SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997:

The Company has adopted the Code of Conduct for Prevention of Insider Trading in the equity shares of the Company. This code is known as the Rolta Directors and Designated Employees Code of Conduct for Prevention of Insider Trading. The Company's Insider Trading Code of Conduct, inter-alia prohibits purchase / sale of equity shares of the Company by the Directors and Designated Employees in management position (at the level of Group Directors and above) while in possession of unpublished price sensitive information in relation to the Company. The Company makes disclosures to the Stock Exchanges of transactions covered under the "Rolta Directors and Designated Employees Code of Conduct for Prevention of Insider Trading". This code meets with the regulations stipulated by the Securities and Exchange Board of India (SEBI), on Prohibition of Insider Trading.

The Company also made disclosures to the Stock Exchanges for transactions covered under the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 by submitting the requisite reports and applications under the said Regulations.

7. Disclosures

Related party transactions are defined as transactions of the Company of material nature with Promoters, Directors or the management, their relatives, subsidiaries, etc. that may have potential conflict with the interest of the Company at large. Details of material and significant related party transactions are given in the Notes to the Accounts annexed to the financial statements. Necessary approvals, as required are taken before entering into any such arrangements.

The Company's equity shares are listed on Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE) and the Company's Global Depository Receipts (GDRs) have been listed with London Stock Exchange. The Company has paid the Listing Fees, as applicable to the BSE, NSE and LSE for the Financial year 2011-12.

The Company has duly complied with the requirements of the revised Clause 49 of the Listing Agreement with the Stock Exchanges, as well as with the Regulations of the Securities and Exchange Board of India and such other statutory authority relating to the Capital Markets.

A qualified practicing Company Secretary carried out secretarial audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The secretarial audit report confirms that the total issued/paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.

The Company follows Accounting Standards issued by the Institute of Chartered Accountants of India. In the preparation of the financial statements, the Company has not adopted a treatment different from that prescribed in any Accounting Standard. The Company also publishes its Accounts drawn under International Financial Reporting Standards (IFRS).

8. Means of Communication

Timely disclosure of consistent, relevant and up-to-date information on corporate matters, financial matters etc., are at the core of good corporate governance. Towards this end, the quarterly results of the Company were published within 45 days of the end of each quarter and the Audited Annual Results within 60 days of the end of the financial year. The Company also ensures that Press Releases are issued on significant developments and the Investors kept informed of important announcements. The Quarterly Financial Results are published in English and vernacular newspapers. These results are generally published in the all India editions of The Economic Times / Business Standard / Financial Express and other English and vernacular newspapers. The results are posted on the Company's website www.rolta.com. Investor / shareholders may directly address their queries at investor@rolta.com. The results and the various Press Releases issued by the Company are also promptly forwarded to the Stock Exchanges whereat the equity shares of the Company are listed. The Company frequently organizes facilities visits for representatives of institutional investors. These visits are generally accompanied by presentations by the Company's Strategic Business Units and a briefing on the Company's products and services both in the international markets and in India. The entire Annual Report of the Company as well as the Quarterly Results are also available on the Company's website. The Management's Discussion and Analysis (MDA)giving an overview of the Company's business and its financials etc., Risk Management, Shareholders' Information, Ratio & Ratio Analysis, Directors' Profile, are provided separately in this Annual Report.

In terms of the green initiative launched by the Ministry of Corporate Affairs, to allow service of documents to the members through electronic mode, Rolta would send the copy of Annual Report for the year 2011-12 alongwith the Notice convening the Annual General Meeting to those shareholders who have registered their email id with the DPs/ R&T Agents, and have opted not to receive Annual Reports in physical form.

9. General Shareholders Information

Mandatory as also various additional voluntary information of interest to investors is furnished in a separate section 'Shareholders Information' elsewhere in this Annual Report.

Shareholders are requested to send all correspondences with regard to Transfer of shares, Change of Address, Bank Mandate for Dividend payment and other grievances etc. to the Registrar and Transfer Agent M/s Link Intime India Pvt Ltd at the following address:

M/s. Link Intime India Pvt Ltd

Unit :- Rolta India Ltd.

C-13 Pannalal Silk Mills Compound,

LBS Marg, Bhandup (West),

Mumbai - 400078

Tel No:- 022-25963838, Fax No :- 022-25946969

Email: rnt.helpdesk@linkintime.co.in

Shareholder Information

Annual General Meeting:

Date24th November 2012

Time: 11.30 a.m

Venue: Rolta India Limited, Auditorium, Rolta Tower - A, Rolta Technology Park, MIDC-Marol, Andheri (East), Mumbai - 400093.

Financial Calendar for the Year 2012-13 (tentative)

1st Quarter ended Sep. 2012 - on or before 15th Nov. 2012.

2nd Quarter ended Dec. 2012 - on or before 15th Feb. 2013.

3rd Quarter ended Mar. 2013 - on or before 15th May 2013.

4th Quarter & Financial year ended June 2013 (Audited) - on or before 30th Aug. 2013

Date of Book Closure:

17th November 2012 to 24th November 2012 (both days inclusive)

Dividend Payment Date:

Rs.3.00 per share (proposed). N-ECS Credit between 28th November 2012 & 12th December 2012. Dividend warrants would be posted on or after 28th November, 2012 and within 30 days from the date of declaration of dividend as provided in the Companies Act, 1956.

Listing Details: Equity Shares

1. Bombay Stock Exchange Limited - (BSE)

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001.

2. National Stock Exchange of India Limited - (NSE)

Exchange Plaza, Bandra-Kurla Complex,

Bandra (East), Mumbai - 400051.

3. ISIN: INE293A01013

Stock Code:

BSE – 500366:

NSE - ROLTA

BLOOMBERG - RLTA@IN

LSE – RTI: REUTERS - ROLTA BO

The shares form part of the following indexes on BSE and NSE

BSE: NSE

BSE Midcap: Nifty Midcap 50

BSE 500: CNX IT: S&P CNX 500

The shares of the Company have been removed for trading from “Equity Options” and “Equity Futures” with effect from 30/09/2012

International Listing

London Stock Exchange

10 Paternoster Square, London, EC4M 7LS

The Company's Global Depositary Receipts (GDR)

Programme has been listed on the Main Board of the London

Stock Exchange pic. (LSE).

The GDRs are traded on the London Stock Exchange under the Ticker Symbol RTI. Each GDR represents one equity share. The GDRs began trading on the LSE on April 18, 2006, when they were issued by the Deutsche Bank Trust Company Americas (the Depositary), pursuant to the Depositary Agreement. The Rule 144A GDRs have been designated as eligible for trading in the Portal Market of The NASDAQ Stock Market, Inc. (PORTAL). As on June 30, 2012, there were 34,76,498 GDRs (equivalent to 34,76,498 equity shares) outstanding.

Two-way Fungibility of Depositary Receipts

The Company offers foreign investors the facility for conversion of Ordinary Shares into Depositary Receipts within the limits permissible for Two-way Fungibility, announced by the Reserve Bank of India vide its circular dated February 13, 2002.

Name and Address of the Depository Bank for the Purpose of GDRs

In the US

Deutsche Bank Trust Company

Americas

Trust & Securities Services

60 Wall Street, 27th Floor, MS # NyC60-2727

In India

Deutsche Bank A.G.

Trust & Securities Services

Hazarimal Somani Marg,

Fort, Mumbai - 400001 India.

New York, NY 10005, USA.

Name and address of the Custodian in India for the purpose of GDRs

ICICI Bank Limited

Securities Markets Services, Empire Complex, F7/E7

1st Floor, 414, Senapati Bapat Marg, Lower Parel,

Mumbai - 400 013.

Registered Office and Corporate Headquarters:

Rolta Tower 'A', Rolta Technology Park, MIDC-Marol,

Andheri (East), Mumbai - 400093.

Telephone: +91(22) 29266666 / 30876543

Fax: + 91(22) 28365992

Share Transfer System:

Share Transfers in physical form can be lodged with Link Intime India Pvt. Ltd. at the following address:

M/s Link Intime India Pvt Ltd

Unit :- Rolta India Ltd.

C-13 Pannalal Silk Mills Compound,

LBS Marg, Bhandup (West), Mumbai - 400078.

Tel No:- 022-25963838, Fax No :- 022-25946969

Email : rnt.helpdesk@linkintime.co.in

The transfers received by the Company/ Registrar & Share Transfer Agent are generally processed and transferred within 30 days from the date of receipt if the documents are complete in all respects. Recently, the Company has empowered certain Directors of the Board to approve transfers within 15 days from the date of receipt of share transfer documents.

Designated e-mail address of investor services

In terms of Clause 47(f) of the Listing Agreement, the designated e-mail address for investor complaints is investor@rolta.com

Website:

The website of the Company carries relevant information in regard to the results of the Company, dividend declared by the Company, price sensitive information if any and launch of new products & services by the Company. The Company's website address is www.rolta.com

Depositories

a) National Securities Depository Ltd. (NSDL)

b) Central Depository Services (India) Ltd. (CDSL)

Annual Listing fees for the year 2012-13 (as applicable) have been paid to the Stock Exchanges.

Volume as percentage of Equity

The Company's scrip continues to enjoy high trading volumes in relevant stock exchanges offering high liquidity. Over 85.04% of the trading volume is on the NSE. The total number of shares traded on National Stock Exchange and Bombay Stock Exchange Limited between July 1, 2011 and June 30, 2012 was 204,749,637 which represents 126.92 % of the Share Capital of the Company as on 30th June 2012.

10. CEO/CFO Certification

A certificate from Chairman and Managing Director and Director (Finance) on the financial statements of the Company and on the matters which were required to be certified according to the Clause 49(V) was placed before the Board.

11. Code of Conduct for Directors and Senior Management

The Rolta Code of Conduct (Code) is applicable to all Directors (including Whole-time Directors) and Senior Management of the Company at the level of Executive Directors and above. The Code lays down the standards of business conduct, ethics for transparent corporate governance. A copy of the Code has been posted on the Company's website. The Code has been circulated to all members of the Board and Senior Management and the compliance of the same has been affirmed by them.

Report on Corporate Governance

This Corporate Governance Report forms part of the Annual Report. The Company is fully compliant with the provisions of Clause 49 of the Listing Agreement of the Stock Exchanges in India.

Compliance with the Corporate Governance codes

Corporate Governance Voluntary Guidelines, 2009

The Ministry of Corporate Affairs, Government of India, published the Corporate Governance Voluntary Guidelines 2009. The Ministry hopes that adoption of these guidelines will also translate into a much higher level of stakeholders' confidence that is crucial to ensuring long-term sustainability and value generation by business. We substantially comply with the Corporate Governance Voluntary Guidelines.

SEBI, with a view to improve corporate governance standards in India and to enhance the transparency and integrity of the market, constituted the Committee on Corporate Governance under the chairmanship of N. R. Narayana Murthy. The Committee issued two sets of recommendations: the mandatory recommendations and the non-mandatory recommendations.

The Company fully complies with the mandatory revised Clause 49 of the Listing Agreement and also some of the non-mandatory provisions such as Remuneration Committee and unqualified financial statements.

Compliance

Certificate from the Statutory Auditors confirming compliance with Clause 49 of the Listing Agreement is published below

Audit Qualification

During the year under review, there was no audit qualification in Company's financial statements.