board of directors' report and csr- co act 2013
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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.
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.
WhatisincludedinAnnualReport?
Typicalannualreportswillinclude• GeneralCorporateInformation• Accountingpolicies• Balancesheet• Cashflowstatement• Profitandlossaccount• Notestothefinancialstatements• Auditorsreport
SPRS AND CO.
WhatisincludedinAnnualReport?
Typicalannualreportswill include(non-auditedinformation)
• Chairpersonsstatement• Operatingandfinancialreview• NoticeofAGM• AttendanceSlipandProxyForm• Otherfeatures
SPRS AND CO.
WhatisincludedinAnnualReport?
Typicalannualreportswillinclude(non-auditedinformation)
SPRS AND CO.
AnnualReportConsistsof
AnnualFinancialStatementsalongwithAuditors’Report
Board/Directors’Report
SecretarialAuditReport,ifapplicableSPRS
AND CO.
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BOARDREPORT
SPRS AND CO.
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
GeneralRules
• PreparedonthebasisofStandAloneFinancialStatementsofthecompany
• Separatesectiononperformanceandfinancialpositionofitssubsidiaries,JointVentureCompaniesandAssociateCompanies
• Signedby– Chairpersonor– TwodirectorsincludingManagingDirector,ifany.
DisclosuresrequiredinBoardReport
1.• UnderCompaniesAct,2013
2.•ListingRegulations andSEBI(ShareBasedEmployee Benefits)Regulations,2014
3.• Anyotherlawthatmayapplytothecompany
DISCLOSURESUNDERSection134(3)
ofCompaniesAct,2013&
Rule8oftheCompaniesAct(Accounts)Rules.
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
CONTENTSOFREPORTSec134(3)
• Numberofmeetingsheldinayear– 4meetinginayear– OnemeetingperQuarter– MaximumgapbetweentwoBMnotmorethan120days.
CONTENTSOFREPORTSec134(3)
• Frauds reported by Auditors otherthan reportable to CG– 143(12)
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
CONTENTSOFREPORTSec134(3)• ExplanationandCommentsonevery
qualificationandreservation ontheadverseremarkanddisclaimermade– Bytheauditorinhisreport– BythecompanysecretaryinpracticeinhisSecretarialReport
• particularsofloans,guaranteesorinvestmentsundersection186
• ParticularsofcontractsandagreementsenteredintoinFORMAOC2– DetailsofcontractorarrangementthatareArmsLengthPrice
– DetailsofContractsorarrangementthatarenotatArmsLengthPrice
CONTENTSOFREPORTSec134(3)
• Thestateofthecompany’saffairs• AmountproposedtocarriedtoReserves• DividendRecommended,ifany.• MaterialchangessubsequenttoFYclosure
CONTENTSOFREPORTSec134(3)
• Theconservationofenergy,technologyabsorption,foreignexchangeearningsandoutgo
• RiskManagementPolicy
• PolicydevelopedandimplementedontheCorporateSocialResponsibilityinitiativesduringtheyear– BriefoutlineaboutCosCSRPolicy– CompositionofCSRCommittee– AverageNPfor3years– PrescribedCSRexpenditure– DetailsofCSRSpends– ReasonsfornotspendingprescribedCSRamount– ResponsibilityStatementbyCSRCommittee
– Applicableto:• CowithaNWofRs.500crore• TurnoverofRs.1000Crore• NetProfitofRs.5Crore inthelast3years
CONTENTSOFREPORTSec134(3)
CONTENTSOFREPORTSec134(3)DirectorsResponsibilityStatement:
• Applicableaccountingstandardshavebeenfollowed
• ConsistentAccountingPoliciesappliedtorepresenttrueandfairviewofstateoftheaffairsoftheCompany
• Properandsufficientcareforaccountingrecordsandfrauddetectionmechanism
• Goingconcernbasis• InternalfinancialcontrolforListedCompanies• Mechanismtoensurecompliancesofallthe
applicablelaws.
• DetailsofperformanceevaluationmadebytheBoardonitsownperformance andoftheCommitteesandindividualDirectors– Applicableto
• ListedCos• PublicCohavingpaidupcapitalmorethanRs.25Crores
CONTENTSOFREPORTSec134(3)
• Section199:(12)EverylistedcompanyshalldiscloseintheBoard'sreport,theratiooftheremuneration ofeachdirector tothemedianofemployee'sremuneration.(14)MDorWTDgettingcommissionfromtheCompany mayalsogetcommissionfromitsHCorSCsubjecttoitsdisclosurebythecompanyintheBoard'sreport.
DISCLOSUREUNDERCOMPANIES(ACCOUNTS)RULES,2014
DisclosureunderRule8(5):• Financialsummaryorhighlights• Changeinnatureifbusiness,ifany• DetailsofchangeintheDirectorsorkeyManagerialPersonnel
• DetailsofDepositsacceptedduringtheyear,remainedunpaidorunclaimedasattheendoftheyear.
• Anymaterialorderpassedbythecourtorregulatoraffectingthestatusoroperationsofthecompany.
ANYOTHERLAWTHATMAYAPPLYTOTHECOMPANY
ForExample
• Section22ofTHESEXUALHARASSMENTOFWOMENATWORKPLACE(PREVENTION,PROHIBITIONANDREDRESSAL)Act– AnnualReportoftheBoardtocontainNo.ofcasesfiledanddisposedoffduringtheyear.
SuggestedListofItemstobeIncludedIntheReportonCorporateGovernanceintheAnnualReportof
Companies
Non- mandatoryitemsthatcanbeincluded:
• Briefstatementoncompany’sphilosophyoncodeofgovernance
• BoardofDirectors– CompositionandCategory– AttendanceofeachdirectorattheBoardmeetingsandthelastAGM
– NumberofotherBoardsorBoardCommitteesinwhichhe/sheisamemberorChairperson.
• DetailsofVariousCommitteesoftheBoard:– CompositionandnamesofmembersandChairperson
– Meetingsandattendanceduringtheyear
• Meansofcommunication– Quarterlyresults– Newspaperswhereinresultsnormallypublished– Anywebsite,wheredisplayed– Whetheritalsodisplaysofficialnewsreleases;and
– Thepresentationsmadetoinstitutionalinvestorsortotheanalysts.
• GeneralShareholderInformation:– DateofBookclosure– DividendPaymentDate– RegistrarandTransferAgents– ShareTransferSystem– Distributionofshareholding– Dematerializationofsharesandliquidity,etc.
• Detailsofnon-compliancebythecompany,penalties,stricturesimposedonthecompanybyStockExchangeorSEBIoranystatutoryauthority,onanymatterrelatedtocapitalmarkets,duringthelastthreeyears.–MandatoryNow
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.
35SPRS
AND CO.
Sec135(1)&(2)- Applicability
• ConstituteCSRCommitteehaving3Directors(1ID)
• DisclosecompositionofCSRCinBR
– NWmorethanRs.500Crore;or– T/OmorethanRs.1000Crore;or– NPmorethanRs.5Crore
SPRS AND CO.
Sec135- CSRC
Shall• FormulateCSRPolicy• RecommendCSRObligation• MonitorimplementationofCSRP
SPRS AND CO.
Sec135(5)
Shall• FormulateCSRPolicy• RecommendCSRObligation• MonitorimplementationofCSRP
SPRS AND CO.
Sec135- Compliance(5)TheBoardofeverycompanyreferredtoinsub-section(1),shallensurethatthecompanyspends,ineveryfinancialyear,atleasttwopercent, oftheaveragenetprofitsofthecompanymadeduringthethreeimmediatelyprecedingfinancialyears,inpursuanceofitsCorporateSocialResponsibilityPolicy:……….
Providedfurtherthatifthecompanyfailstospendsuchamount,theBoardshall,initsreportmadeunderclause(o)ofsub-section(3)ofsection134,specifythereasonsfornotspendingtheamount.
SPRS AND CO.
ContactCo-ordinatesCS Rahul P. SahasrabuddheFounding Partner
SPRS And CoCompany SecretariesMobile No. 98 196 500 45Email: [email protected]
THANKYOU40