board of directors' report and csr- co act 2013
TRANSCRIPT
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ANNUALREPORT
SPRS AND CO.
“DirectorsReportandCorporateSocialResponsibility”CompaniesLawRefresherCourse
organizedbyPuneBranchofWIRCofICAI
- CSRahulSahasrabuddhe
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• VIEWS EXPRESSED IN THISPRESENTATION ARE STRICTLY MYPERSONAL VIEWS AND NEED NOTNECESSARILY BE VIEWS OF ANY OFMY PAST OR PRESENTORGANISATIONS, I HAVE WORKED/AMWORKINGWITH.
• CARICATURES USED IS NOT THEWORKOFMINE.
• THIS PRESENTATION IS FORACADEMIC PURPOSEONLY.
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ANNUALREPORT
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An Annual Report is acomprehensive report on acompany's activitiesthroughout the precedingyear. Annual reports areintended to give shareholdersand other interested peopleinformation about thecompany's activities andfinancial performance.
SPRS AND CO.
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WhatisincludedinAnnualReport?
Typicalannualreportswillinclude• GeneralCorporateInformation• Accountingpolicies• Balancesheet• Cashflowstatement• Profitandlossaccount• Notestothefinancialstatements• Auditorsreport
SPRS AND CO.
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WhatisincludedinAnnualReport?
Typicalannualreportswill include(non-auditedinformation)
• Chairpersonsstatement• Operatingandfinancialreview• NoticeofAGM• AttendanceSlipandProxyForm• Otherfeatures
SPRS AND CO.
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WhatisincludedinAnnualReport?
Typicalannualreportswillinclude(non-auditedinformation)
SPRS AND CO.
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AnnualReportConsistsof
AnnualFinancialStatementsalongwithAuditors’Report
Board/Directors’Report
SecretarialAuditReport,ifapplicableSPRS
AND CO.
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BOARDREPORT
SPRS AND CO.
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WhyBoardReport?
Some people have legitimately asked whether thecosts of governance reforms are too high. In thiscontext, it should be noted that the failure toimplement good governance procedures has a costbeyond mere regulatory problems. Companies that donot employ meaningful governance procedures willhave to pay a significant risk premium whencompeting for scarce capital in today’s publicmarkets.
N.RNarayanaMurthyChairmanCommitteeonCorporateGovernance,SEBI
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Whatisboardreport?• It is a document by the board to shareholdersreportingon the company's condition
• It is an inalienable part of the annual report.• The report includes a summary of initiatives,activities of the board, and personalperspectiveof the company's future.
• Board Report is also known as Directors’Report
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GeneralRules
• PreparedonthebasisofStandAloneFinancialStatementsofthecompany
• Separatesectiononperformanceandfinancialpositionofitssubsidiaries,JointVentureCompaniesandAssociateCompanies
• Signedby– Chairpersonor– TwodirectorsincludingManagingDirector,ifany.
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DisclosuresrequiredinBoardReport
1.• UnderCompaniesAct,2013
2.•ListingRegulations andSEBI(ShareBasedEmployee Benefits)Regulations,2014
3.• Anyotherlawthatmayapplytothecompany
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DISCLOSURESUNDERSection134(3)
ofCompaniesAct,2013&
Rule8oftheCompaniesAct(Accounts)Rules.
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CONTENTSOFREPORTSec134(3)ExtractsofAnnualReturnasprovidedundersection92(3)FormNo.MGT-9
1. REGISTRATIONANDOTHERDETAILS:2. PRINCIPALBUSINESSACTIVITIESOFTHECOMPANY3. PARTICULARSOFHOLDING,SUBSIDIARYANDASSOCIATECOMPANIES4. SHAREHOLDINGPATTERN
a) Category-wiseShareHoldingb) ShareholdingofPromotersc) ChangeinPromoters’Shareholdingd) ShareholdingPatternoftoptenShareholderse) ShareholdingofDirectorsandKeyManagerialPersonnel:
5. INDEBTEDNESS6. REMUNERATIONOFDIRECTORSANDKEYMANAGERIALPERSONNEL7. PENALTIES/PUNISHMENT/COMPOUNDINGOFOFFENCES
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CONTENTSOFREPORTSec134(3)
• Numberofmeetingsheldinayear– 4meetinginayear– OnemeetingperQuarter– MaximumgapbetweentwoBMnotmorethan120days.
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CONTENTSOFREPORTSec134(3)
• Frauds reported by Auditors otherthan reportable to CG– 143(12)
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CONTENTSOFREPORTSec134(3)• Statement of Declaration 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 turnovermore than Rs. 100 Crores– Public Cos having loans/borrowings/Deposits over Rs.
50 Crores
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CONTENTSOFREPORTSec134(3)• ExplanationandCommentsonevery
qualificationandreservation ontheadverseremarkanddisclaimermade– Bytheauditorinhisreport– BythecompanysecretaryinpracticeinhisSecretarialReport
• particularsofloans,guaranteesorinvestmentsundersection186
• ParticularsofcontractsandagreementsenteredintoinFORMAOC2– DetailsofcontractorarrangementthatareArmsLengthPrice
– DetailsofContractsorarrangementthatarenotatArmsLengthPrice
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CONTENTSOFREPORTSec134(3)
• Thestateofthecompany’saffairs• AmountproposedtocarriedtoReserves• DividendRecommended,ifany.• MaterialchangessubsequenttoFYclosure
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CONTENTSOFREPORTSec134(3)
• Theconservationofenergy,technologyabsorption,foreignexchangeearningsandoutgo
• RiskManagementPolicy
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• PolicydevelopedandimplementedontheCorporateSocialResponsibilityinitiativesduringtheyear– BriefoutlineaboutCosCSRPolicy– CompositionofCSRCommittee– AverageNPfor3years– PrescribedCSRexpenditure– DetailsofCSRSpends– ReasonsfornotspendingprescribedCSRamount– ResponsibilityStatementbyCSRCommittee
– Applicableto:• CowithaNWofRs.500crore• TurnoverofRs.1000Crore• NetProfitofRs.5Crore inthelast3years
CONTENTSOFREPORTSec134(3)
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CONTENTSOFREPORTSec134(3)DirectorsResponsibilityStatement:
• Applicableaccountingstandardshavebeenfollowed
• ConsistentAccountingPoliciesappliedtorepresenttrueandfairviewofstateoftheaffairsoftheCompany
• Properandsufficientcareforaccountingrecordsandfrauddetectionmechanism
• Goingconcernbasis• InternalfinancialcontrolforListedCompanies• Mechanismtoensurecompliancesofallthe
applicablelaws.
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• DetailsofperformanceevaluationmadebytheBoardonitsownperformance andoftheCommitteesandindividualDirectors– Applicableto
• ListedCos• PublicCohavingpaidupcapitalmorethanRs.25Crores
CONTENTSOFREPORTSec134(3)
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• Section199:(12)EverylistedcompanyshalldiscloseintheBoard'sreport,theratiooftheremuneration ofeachdirector tothemedianofemployee'sremuneration.(14)MDorWTDgettingcommissionfromtheCompany mayalsogetcommissionfromitsHCorSCsubjecttoitsdisclosurebythecompanyintheBoard'sreport.
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DISCLOSUREUNDERCOMPANIES(ACCOUNTS)RULES,2014
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DisclosureunderRule8(5):• Financialsummaryorhighlights• Changeinnatureifbusiness,ifany• DetailsofchangeintheDirectorsorkeyManagerialPersonnel
• DetailsofDepositsacceptedduringtheyear,remainedunpaidorunclaimedasattheendoftheyear.
• Anymaterialorderpassedbythecourtorregulatoraffectingthestatusoroperationsofthecompany.
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ANYOTHERLAWTHATMAYAPPLYTOTHECOMPANY
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ForExample
• Section22ofTHESEXUALHARASSMENTOFWOMENATWORKPLACE(PREVENTION,PROHIBITIONANDREDRESSAL)Act– AnnualReportoftheBoardtocontainNo.ofcasesfiledanddisposedoffduringtheyear.
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SuggestedListofItemstobeIncludedIntheReportonCorporateGovernanceintheAnnualReportof
Companies
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Non- mandatoryitemsthatcanbeincluded:
• Briefstatementoncompany’sphilosophyoncodeofgovernance
• BoardofDirectors– CompositionandCategory– AttendanceofeachdirectorattheBoardmeetingsandthelastAGM
– NumberofotherBoardsorBoardCommitteesinwhichhe/sheisamemberorChairperson.
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• DetailsofVariousCommitteesoftheBoard:– CompositionandnamesofmembersandChairperson
– Meetingsandattendanceduringtheyear
• Meansofcommunication– Quarterlyresults– Newspaperswhereinresultsnormallypublished– Anywebsite,wheredisplayed– Whetheritalsodisplaysofficialnewsreleases;and
– Thepresentationsmadetoinstitutionalinvestorsortotheanalysts.
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• GeneralShareholderInformation:– DateofBookclosure– DividendPaymentDate– RegistrarandTransferAgents– ShareTransferSystem– Distributionofshareholding– Dematerializationofsharesandliquidity,etc.
• Detailsofnon-compliancebythecompany,penalties,stricturesimposedonthecompanybyStockExchangeorSEBIoranystatutoryauthority,onanymatterrelatedtocapitalmarkets,duringthelastthreeyears.–MandatoryNow
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Contravention
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• Coshallbeliable• Rs.50ktoRs.2500K
• Officer– Imprisionmentupto3years;or– Rs.50ktoRs.500K
SPRS AND CO.
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“DirectorsReportandCorporateSocialResponsibility”CompaniesLawRefresherCourse
organizedbyPuneBranchofWIRCofICAI
SPRS AND CO.
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35SPRS
AND CO.
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Sec135(1)&(2)- Applicability
• ConstituteCSRCommitteehaving3Directors(1ID)
• DisclosecompositionofCSRCinBR
– NWmorethanRs.500Crore;or– T/OmorethanRs.1000Crore;or– NPmorethanRs.5Crore
SPRS AND CO.
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Sec135- CSRC
Shall• FormulateCSRPolicy• RecommendCSRObligation• MonitorimplementationofCSRP
SPRS AND CO.
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Sec135(5)
Shall• FormulateCSRPolicy• RecommendCSRObligation• MonitorimplementationofCSRP
SPRS AND CO.
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Sec135- Compliance(5)TheBoardofeverycompanyreferredtoinsub-section(1),shallensurethatthecompanyspends,ineveryfinancialyear,atleasttwopercent, oftheaveragenetprofitsofthecompanymadeduringthethreeimmediatelyprecedingfinancialyears,inpursuanceofitsCorporateSocialResponsibilityPolicy:……….
Providedfurtherthatifthecompanyfailstospendsuchamount,theBoardshall,initsreportmadeunderclause(o)ofsub-section(3)ofsection134,specifythereasonsfornotspendingtheamount.
SPRS AND CO.
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ContactCo-ordinatesCS Rahul P. SahasrabuddheFounding Partner
SPRS And CoCompany SecretariesMobile No. 98 196 500 45Email: [email protected]
THANKYOU40