REPORT OF KUMARA MANGALAM BIRLA COMMITTEE

The Kumar Mangalam Birla Committee was set up in 1999 by SEBI after one of its members
Shri Kumar Mangalam Birla. The main objective of this committee was to view corporate
governance from the perspective of the investors and shareholders and to prepare a code of
conduct that is suitable for corporate environment in India.

The recommendations were broadly divided into two categories namely mandatory and non-
mandatory recommendations.

MANDATORY RECOMMENDATIONS:

The recommendations that are absolutely necessary for the corporate governance of an
organization and those that can be defined precisely and enforced through amendment of the
listing agreement are referred to as mandatory recommendations.

Recommendations:-

1. This recommendation is applicable to those companies that are listed and has a paid
up share capital worth ₹. 3crores and above.
2. The board of directors should be an optimum mix of both executive and non-
executive directors.
3. The audit committee should have minimum 3 independent directors out of which at
least one should have financial and accounting knowledge.
4. At least 4 meetings should be conducted in a year with a maximum gap of 4 months
between 2 consecutive meetings.
5. The information must be shared to the shareholders with respect to their investments.
6. A separate committee for remuneration must be set up.
7. Management discussion and other analysis report like industry structure,
opportunities, threats, risks, outlook, and internal control systems must be presented
for external review.
NON-MANDATORY RECOMMENDATIONS:

Those recommendations which are either desirable or which many require certain changes are
referred to as non-mandatory recommendations.

Recommendations:-

1. Role of chairman
2. Remuneration committee of board
3. Shareholders’ right for receiving half yearly financial performance.
4. Sale of whole or a substantial part of the undertaking.
5. Corporate restructuring
6. Further issue of capital
7. Venturing into new businesses

TCS COMPLIANCE WITH THE RECOMMENDATIONS ISSUED BY KUMAR

MANGALAM BIRLA COMMITTEE

TCS which comes a under the brand known for trust the TATA group has inherited the
legacy of fair and transparent corporate governance. It is a highly successful business and has
sustained its position by adhering to high standards of principled conduct through TCoC
(Tata Code of Conduct).

Compliance with recommendations:

1. TCS has an optimum mixture of board of directors Board of Directors. On the whole,
it has 9 Board of Directors out of which 7 are Non-Executive and 2 are Executive
board members.
2. The various committees of the board members include: Audit Committee, Nomination
and Remuneration Committee, Stakeholder Relationship Committee and Risk
management Committee. The number of members in each of these committees varies
from 2-6.
3. As per 30th September 2020 (Q3) 3 meetings were held on 3rd July 2020, 9th July 2020
and 29th September 2020. The maximum gaps held between two consecutive meetings
are 83 days (16th April 2020-9th July 2020).
REFERENCE:

1) https://www.tcs.com/corporate-governance
2) https://www.tcs.com/content/dam/tcs/pdf/discover-tcs/investor-relations/corporate-
governance/fy21/Corporate%20Governance%20Report%20for%20the%20quarter
%20ended%20Sep%2030,%202020.pdf