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Board of Directors' Report and CSR- Co Act 2013
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- 2. 1 • VIEWS EXPRESSEDIN THIS PRESENTATION ARE STRICTLY MY PERSONAL VIEWS AND NEED NOT NECESSARILY BE VIEWS OF ANY OF MY PAST OR PRESENT ORGANISATIONS, I HAVE WORKED/ AM WORKINGWITH. • CARICATURES USED IS NOT THE WORK OF MINE. • THIS PRESENTATION IS FOR ACADEMIC PURPOSEONLY.
- 3. ANNUAL REPORT 2 An Annual Reportis a comprehensive report on a company's activities throughout the preceding year. Annual reports are intended to give shareholders and other interested people information about the company's activities and financial performance. SPRS AND CO.
- 4. What is included in Annual Report? Typical annual reports will include • General Corporate Information • Accounting policies •Balance sheet • Cash flow statement • Profit and loss account • Notes to the financial statements • Auditors report SPRS AND CO.
- 5. What is included in Annual Report? Typical annual reports will include (non-audited information) • Chairpersons statement • Operating and financial review •Notice of AGM • Attendance Slip and Proxy Form • Other features SPRS AND CO.
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- 9. Why Board Report? Some people havelegitimately asked whether the costs of governance reforms are too high. In this context, it should be noted that the failure to implement good governance procedures has a cost beyond mere regulatory problems. Companies that do not employ meaningful governance procedures will have to pay a significant risk premium when competing for scarce capital in today’s public markets. N. R Narayana Murthy Chairman Committee on Corporate Governance, SEBI
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- 11. What is board report? • It isa document by the board to shareholders reportingon the company'scondition • It is an inalienable part of the annual report. • The report includes a summary of initiatives, activities of the board, and personal perspectiveof the company'sfuture. • Board Report is also known as Directors’ Report
- 12. General Rules • Prepared on the basis of Stand Alone Financial Statements of the company • Separate section on performance and financial position of its subsidiaries, Joint Venture Companies and Associate Companies •Signed by – Chairperson or – Two directors including Managing Director, if any.
- 13. Disclosures required in Board Report 1. • Under Companies Act, 2013 2. •Listing Regulations and SEBI (Share Based EmployeeBenefits) Regulations, 2014 3. • Any other law that may apply to the company
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- 15. CONTENTS OF REPORT Sec 134 (3) Extracts of Annual Return as provided under section 92(3) Form No. MGT-9 1. REGISTRATION AND OTHER DETAILS: 2. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY 3.PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES 4. SHARE HOLDING PATTERN a) Category-wise Share Holding b) Shareholding of Promoters c) Change in Promoters’ Shareholding d) Shareholding Pattern of top ten Shareholders e) Shareholding of Directors and Key Managerial Personnel: 5. INDEBTEDNESS 6. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL 7. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES
- 16. CONTENTS OF REPORT Sec 134 (3) • Number of meetings held in a year – 4 meeting in a year –One meeting per Quarter – Maximum gap between two BM not more than 120 days.
- 17. CONTENTS OF REPORT Sec 134 (3) • Frauds reportedby Auditors other than reportable to CG – 143(12)
- 18. CONTENTS OF REPORT Sec 134 (3) • Statement ofDeclaration given by ID • Companies Policy with regard to the – Qualification – Appointment – Remuneration Applicable to – Listed Cos – Public Cos with a pd up capital more than Rs. 10 Crores – Public Cos with a turnover more than Rs. 100 Crores – Public Cos having loans/borrowings/Deposits over Rs. 50 Crores
- 19. CONTENTS OF REPORT Sec 134 (3) • Explanation and Comments on every qualification and reservation on the adverse remark and disclaimer made –By the auditor in his report – By the company secretary in practice in his Secretarial Report • particulars of loans, guarantees or investments under section 186 • Particulars of contracts and agreements entered into in FORM AOC 2 – Details of contract or arrangement that are Arms Length Price – Details of Contracts or arrangement that are not at Arms Length Price
- 20. CONTENTS OF REPORT Sec 134 (3) • The state of the company’s affairs • Amount proposed to carried to Reserves •Dividend Recommended, if any. • Material changes subsequent to FY closure
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- 22. • Policy developed and implemented on the Corporate Social Responsibility initiatives during the year – Brief outline about Cos CSR Policy –Composition of CSR Committee – Average NP for 3 years – Prescribed CSR expenditure – Details of CSR Spends – Reasons for not spending prescribed CSR amount – Responsibility Statement by CSR Committee – Applicable to: • Co with a NW of Rs. 500 crore • Turnover of Rs. 1000 Crore • Net Profit of Rs. 5 Crore in the last 3 years CONTENTS OF REPORT Sec 134 (3)
- 23. CONTENTS OF REPORT Sec 134 (3) Directors Responsibility Statement: • Applicable accounting standards have been followed • Consistent Accounting Policies applied to represent true and fair view of state of the affairs of the Company •Proper and sufficient care for accounting records and fraud detection mechanism • Going concern basis • Internal financial control for Listed Companies • Mechanism to ensure compliances of all the applicable laws.
- 24. • Details of performance evaluation made by the Board on its own performance and of the Committees and individual Directors – Applicable to •Listed Cos • Public Co having paid up capital more than Rs. 25 Crores CONTENTS OF REPORT Sec 134 (3)
- 25. • Section 199 : (12) Every listed company shall disclose in the Board's report, the ratio of the remuneration of each directorto the median of employee's remuneration. (14) MD or WTD getting commission from the Company may also get commission from its HC or SC subject to its disclosure by the company in the Board's report.
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- 27. Disclosure under Rule 8(5): • Financial summary or highlights • Change in nature if business, if any •Details of change in the Directors or key Managerial Personnel • Details of Deposits accepted during the year, remained unpaid or unclaimed as at the end of the year. • Any material order passed by the court or regulator affecting the status or operations of the company.
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- 31. Non- mandatory items that can be included: • Brief statement on company’s philosophy on code of governance •Board of Directors – Composition and Category – Attendance of each director at the Board meetings and the last AGM – Number of other Boards or Board Committees in which he/she is a member or Chairperson.
- 32. • Details of Various Committees of the Board: – Composition and names of members and Chairperson –Meetings and attendance during the year • Means of communication – Quarterly results – Newspapers wherein results normally published – Any website, where displayed – Whether it also displays official news releases; and – The presentations made to institutional investors or to the analysts.
- 33. • General Shareholder Information: – Date of Book closure –Dividend Payment Date – Registrar and Transfer Agents – Share Transfer System – Distribution of shareholding – Dematerialization of shares and liquidity, etc. • Details of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. – Mandatory Now
- 34. Contravention 33 • Co shall be liable • Rs. 50k to Rs. 2500K •Officer – Imprisionmentupto3 years; or – Rs. 50k to Rs. 500K SPRS AND CO.
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- 37. Sec 135 (1) & (2) - Applicability • Constitute CSR Committee having 3 Directors (1 ID) •Disclose composition of CSRC in BR – NW more than Rs. 500 Crore; or – T/O more than Rs. 1000 Crore; or – NP more than Rs. 5 Crore SPRS AND CO.
- 38. Sec 135 - CSRC Shall • Formulate CSR Policy •Recommend CSR Obligation • Monitor implementation of CSRP SPRS AND CO.
- 39. Sec 135(5) Shall • Formulate CSR Policy • Recommend CSR Obligation •Monitor implementation of CSRP SPRS AND CO.
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- 41. Contact Co-ordinates CS Rahul P.Sahasrabuddhe Founding Partner SPRS And Co Company Secretaries Mobile No. 98 196 500 45 Email: [email protected] THANK YOU 40