BOARD REPORT – READY RECKONER (updated up to May 9, 2024)

BOARD'S REPORT – READY RECKONER

                            (covers Companies Act, 2013 as amended from time to time along SEBI (Listing Obligation and Disclosure Requirements) Regulations (“Listing Regulations”) and Secretarial Standard -4 on Board’s Report issued by ICSI (SS-4))

 

Sl. No.	Section under Companies Act, 2013/ its Rules	Particulars	Applicable to						Other Remarks
			Listed Company	Public Company	Pvt. Company	Sec 8 Company	Small Company	OPC
1	Sec 134 (3) (a)	the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed	P	P	P	P	P	P	The earlier requirement of providing an extract of the Annual Return (MGT-9) for the FY ended March 31 every year, in the Board’s Report, has been discontinued by the Companies (Amendment) Act, 2017. Amendment Effective from 31st July, 2018 Refer Sec 92 (3) of the Act.
2	Sec 134 (3) (b)	number of meetings of the Board;	P	P	P	P	P	P	Refer SS-1 and also Para No.6.4 of SS-4 on Secretarial Standards on Report of the Board of Directors issued ICSI.
3	Sec 134 (3) (c)	Directors’ Responsibility Statement;	P	P	P	P	P	P	Refer Sec 134 (5) · it would be necessary for a company to lay down policies and procedures for ensuring efficient and effective conduct of business, safeguarding of its assets and prevention &detection of frauds and errors.   ·  It would be advisable to put in place essential and complete Accounting policies and systems for ensuring timely and reliable MIS.
4	Sec 134 (3) (ca) read with Rule 13(4) of Companies (Audit and Auditors) Rules, 2014	details of frauds reported by auditors under section 143 (12) other than those which are reportable to the Central Government	P	P	P	P	P	P	inserted vide companies (Amendment) Act, 2015   Auditor here refers to Statutory Auditor, Secretarial Auditor or Cost Auditor.   Refer Sec 143(12) read with Rule 13 of Companies (Audit and Auditors) Rules, 2014   Refer SS-4 on Board report issued by ICSI
5	Sec 134 (3) (d)	a statement on declaration given by independent directors under Section 149 (6)	P	P		P			Also Refer Reg 16(1)(b) of the Listing Regulations. Refer ICSI SS-4 under Para 6.3. on Board report issued by ICSI
6	Sec 134 (3) (e)	in case of a company covered under Section 178 (1), company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178 (3);	P	P					This provisions shall not be applicable in case of Government Companies through notification dated 05.06.2015   (refer proviso to Section 178(1) and (3))   Applicability: list company &unlisted public company based on ·      Paid up share capital ≥ Rs. 10 Crs or ·      Turnover ≥ Rs. 100 Crs or ·      Outstanding Loan/ Deposits/ Debentures >Rs. 50Crs.
7	Sec 134 (3) (f)	Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made — (i) by the auditor in his report; and (ii) by the company secretary in practice in his secretarial audit report;	P	P	P	P	P	P	Para 18 of ICSI SS-4 refers,if such qualification, reservation, adverse remark or disclaimer has a material adverse effect on the financial statement or on the functioning of the company, its likely impact and the corrective measures that are proposed to be taken shall also be disclosed in the Report.
8	Sec 134 (3) (g) and Para 9 of SS-4	particulars of loans, guarantees or investments under section 186;	P	P	P	P			A company shall disclose the aforesaid particulars in the notes to the financial statement and give reference thereof in the Report. Sub-section (3) of section 134 of the Act requires that the particulars of loans, guarantees or investments under section 186 shall be disclosed in the Report. Sec 186 is not applicable in case of Govt. Company subject to certain conditions. In respect of companies which are exempt from the provisions of Sec 186 of the Act, provisions w.r.t.  disclosures as required shall not apply.
9	Sec 134 (3) (h)	particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form	P	P	P	P			particulars in Format AoC-2 vide Rule 8 (2) of Companies (Accounts) rules, 2014
10	Sec 134 (3) (i)   Read with SS-4	the state of the company’s affairs;	P	P	P	P	P	P	The state of affairs of the company shall, inter alia, include the following information   i.    segment-wise position of business and its operations;   ii.    change in status of the company;   iii.    key business developments;   iv.    change in the financial year;   v.    capital expenditure program;   vi.    details and status of acquisition, merger, expansion, modernization and diversification; developments, acquisition and assignment of material Intellectual Property Rights;  vii.    any other material event having an impact on the affairs of the company.
11	Sec 134 (3) (j)	the amounts, if any, which it proposes to carry to any reserves;	P	P	P	P	P		As per Sec 123, it is now optional for companies to transfer of amount to reserve even if Company declares/ recommend the dividend. As per SS-4, the amount proposed to be transferred to any reserves of the company shall be included in the Report. If no amount is proposed to be transferred to reserves, a statement to that effect shall be included.
12	Sec 134 (3) (k)	the amount, if any, which it recommends should be paid by way of dividend;	P	P	P		P		Refer Section 123 of the Act on declaration of dividend. As per SS-4, following shall be disclosed in the Board’s Report: a.   The amount of dividend per share and the percentage thereof which the Board recommends for the year and the dividend distribution tax thereon. In case no dividend has been recommended by the Board, a statement to that effect shall be made. b.   The amount and the percentage of interim dividend declared, if any, during the year and the dividend distribution tax thereon. c.   The total amount of dividend for the year. d.   A statement on compliance with the Dividend Distribution Policy, if applicable, and the reasons for deviation and the rationale for additional parameters considered, if any. The amount of tax paid on the distribution of dividend should also be disclosed in the Report. However, with the Union Budget 2020-21 the dividend distribution tax payable by a company, has been removed. Reg.   43A to the Listing Regulations making it mandatory for top 1000 companies to formulate a “Dividend distribution policy”.
13	Sec 134 (3) (l)	material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report;	P	P	P	P	P	P	As per SS-4, the effect of such changes and commitments and an estimate of their financial impact shall also be disclosed in the Report. If evaluation of such an estimate cannot be made, a statement to that effect be made. The causes for such material changes and commitments and the remedial measures taken shall also be disclosed.
13	Sec 134 (3) (m)	the conservation of energy, technology absorption, foreign exchange earnings and outgo;	P	P	P	P	P		check the Sl. No. 20 - Rule 8 (3) Companies (Accounts) Rules, 2014   the requirement of furnishing information and details shall not apply to a government company engaged in producing defence equipment.
14	Sec 134 (3) (n)	a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company;	P	P	P	P	P		SS-4 provides that such statement shall, inter alia, disclose: (a) various elements of risk which, in the opinion of the Board, may threaten the existence of the company and (b)  strategy to mitigate such risks.
15	Sec 134 (3) (o)	the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;	P	P	P	P	P		Refer Section 135 of the Act w.r.t. Corporate Social Responsibility.   SS-4 provides that the Report shall disclose about the CSR policy of the company and the CSR initiatives taken during the year.   Rule 9 of Companies (Accounts) Rules, 2014, disclosure of contents of CSR Policy in Board report and on the Companies website as per annexure to Companies (CSR policy) rules, 2014.   In case of companies not having a website, such companies should provide the details about the CSR policy developed and implemented by the company on CSR initiatives taken during the year.
16	Sec 134 (3) (p)	in case of a listed company and every other public company having such paid-up share capital as may be prescribed, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors.	P	P					Refer Sec 178(2) of the Act pertaining to Performance evaluation of Board, its committee and its directors.   This provision shall not be applied to Govt company wherein directors are evaluated based on their own mythology.   Rule 8 (4) of Companies (accounts) rules, 2014, every listed company and other public companies having paid up capital of Rs. 25 Crores or more, shall include statement of formal evaluation of Board performance, its committees and individual directors.   The Guidance Note on SS-4 on Board Report issued by ICSI provides that the manner of performance evaluation should indicate the process of obtaining feedback, such as feedback sought by way of a structured questionnaire or otherwise, aspects covered in the feedback sought, and whether the Directors were satisfied with the evaluation process.   Further, as per the provisions of Schedule IV to the Act (Code for Independent Directors), the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.   The Listing Regulations contain similar requirement in case of listed companies.
17	Sec 134 (3) (q)	such other matters as may be prescribed							Refer Rule 8(5) of the Companies (Accounts) Rules, 2014. This rule shall not apply to One Person Company or Small Company
18	Rule 8 (1) of Companies (Accounts) Rules, 2014	The Board Report shall be prepared on standalone financial statement of Company and shall report on highlights of performance of subsidiaries, associates and joint venture company and their contribution to the overall performance of the Company during the period under review	P	P	P	P
19	Rule 8 (3)	(A) Conservation of energy - (i) impact on conservation of energy; (ii) the steps taken by the company for utilizing alternate sources of energy; (iii) the capital investment on energy conservation equipment; (B) Technology absorption- (i) the efforts made towards technology absorption; (ii) the benefits derived like product improvement, cost reduction, product development or import substitution; (iii) in case of imported technology (imported during the last 3 years from the beginning of the financial year)-    (a) the details of technology imported;    (b) the year of import;    (c) whether the technology been fully absorbed;    (d) if not fully absorbed, areas where absorption has         not taken place, and the reasons thereof; and (iv) the expenditure incurred on Research and Development. (C) Foreign exchange earnings and Outgo- The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.	P	P	P	P			Not Applicable to Government Company engaged in producing defence equipment
20	Rule 8 (4)	Every Listed Company and every other public company having paid up share capital of Rs. 25 Crores or more calculated at the end of preceding FY shall include, in the report by Board, a statement indicating the manner in which formal evaluation has been made by the Board of its own performance and that of its committee and individuals	P	P
21	Rule 8 (5)	(i) the financial summary or highlights; (ii) the change in the nature of business, if any; (iii) the details of directors or key managerial personnel who were appointed or have resigned during the year; iiia) a statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year”. (iv) the names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year; (v) the details relating to deposits, covered under Chapter V of the Act,- (a) accepted during the year; (b) remained unpaid or unclaimed as at the end of the year; (c) whether there has been any default in repayment of deposits or payment of interest thereon during the amount involved- (1) at the beginning of the year; (2) maximum during the year; (3) at the end of the year; (vi) the details of deposits which are not in compliance with the requirements of Chapter V of the Act; (vii) the details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future; (viii) the details in respect of adequacy of internal financial controls with reference to the Financial Statements.   ix) a disclosure, as to whether maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained,   (x) a statement that the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013]   (xi) the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.   (xii) the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.	P	P	P	P			In case of a listed company, the business highlights should also be reported as per the segment reporting requirements. In case of an unlisted company, the financial summary in the Report may be disclosed segment wise. As per SS-4, in case the company has commenced any new business or discontinued/sold or disposed off any of its existing businesses or hived off any segment or division during the year, the Report shall disclose the details of the same highlighting the key focus areas               SS-4 provides that details of significant and material orders passed by any Regulator, Court, Tribunal, Statutory and quasi-judicial body, impacting the going concern status of the company and its future operations shall be disclosed.         Additionally, SS-4 provides other disclosures in the Board’s Report as under: (a) a statement, wherever applicable, that the consolidated financial statement is also being presented in addition to the standalone financial statement of the company. (b) key initiatives with respect to Stakeholder relationship, Customer relationship, Environment, Sustainability, Health and Safety. (c)   reasons for delay, if any, in holding the annual general meeting;
22	(3A)	Central Government shall prescribe Abridged Board's Report for compliance with this section by OPC and small Company					P	P	Sec 134 (4)states that the report of the Board of Directors to be attached to the financial statement under this section shall, in case of a One Person Company, mean a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.
23	134 (6)	The Board report and any annexures under Sub sec (3) shall be signed by the Chairperson of the Company if authorized by Board and where he is not authorized, shall be signed by at least 2 Directors one of whom shall be MD/ Director where there is one	P	P	P	P	P	P
24	Section 149(10)	Company shall disclose the appointment or re-appointment of Independent Director.	P	P
25	Sec 43 (a) (ii) read with Rule 4 (4) of Companies (share capital and debenture) rules, 2014	The Board of Directors shall, inter alia, disclose, for the financial year in which the issue of equity shares with differential rights was completed	P	P		P			Sec 43 shall not apply to private companies where MoA and AoA so provides
26	Sec 67 read with Rule 16of Companies (share capital and debenture) rules, 2014	Where the voting rights are not exercised directly by the employees in respect of shares to which the scheme relates, the Board of Directors shall, inter alia, disclose certain information for the relevant financial year	P	P		P
27	Sec 54 read with Rule 8	The Board's Report for the year, wherein sweat equity shares are issued, shall contain requisite information.	P	P	P	P	P		Listed Company shall additionally comply with SEBI (Share based Employee Benefits and Sweat Equity) Reg, 2021
28	Sec 62 (1) (b) read with Rule 12	The Board's Report for the year, wherein ESOPs are issued, shall contain requisite information.	P	P	P	P	P		Listed Company has to additional comply with SEBI (Share based Employee Benefits and Sweat Equity) Reg, 2021
	Section 135 (2)	Details of composition of CSR committee, disclose contents of such Policy and if fails to spend such amount, the reason for not spending.	P	P	P
29	Section 177(8).	The composition of an Audit Committee and where the Board had not accepted any recommendation of the Audit Committee, the same shall be disclosed in such report along with the reasons	P	P			P		Refer Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014. Listed Companies has to comply with Reg 18 of Listing Regulations.
30	Proviso to Section 177(10)	Establishment of vigil mechanism	P	P	P				Refer Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014. Listed Companies has to comply with Reg 22 of Listing Regulations.
32	Sec 197 (14)	Any Managing or Whole-time director of the company, who is in receipt of any commission from the company and also receiving any remuneration or commission from any holding company or subsidiary company of such company, has to disclose the same.	P	P		P
	Sec 204 (1)	Secretarial Audit Report (To be annexed with Board’s Report)	P	P	P	P	P		Applicability: Every listed company and class of companies as below: (a) Every public company having a paid-up share capital of Rs. 50 Crores or more; or (b) Every public company having a turnover of Rs. 250 Crores or more; [or] (c) Every company having outstanding loans or borrowings from banks or public financial institutions of Rs. 100 Crores or more.]  Format of Secretarial Audit Report: Form MR 3 Reg 24A of listing regulations, every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex a secretarial audit report given by a company secretary in practice, in such form as specified, with the annual report of the listed entity.
33	Sec 197 (12) read with   Rule 5 (1) of Companies (appointment and remuneration of managerial personnel) Rules, 2014	Every listed company shall disclose in the Board report (i) the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the FY (ii) the percentage increase in remuneration of each director, CFO, CEO, Company Secretary or Managerial in the FY (iii) the percentage increase in the median remuneration of employees in the financial year (iv) the number of permanent employees on the rolls of Company (viii) average percentile increase already made in the salaries of employees other than the managerial personnel in the last FY and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration (xii) affirmation that the remuneration is as per the remuneration policy of the Company	P						(v) to (vii) and (ix) to (xi) of Rule 5 (1) of Companies (appointment and remuneration of managerial remuneration) Rules, 2014 omitted vide amendment rules dated 30.06.2016
34	Sec 197 (14)	Subject to the provisions of this section, any director who is in receipt of any commission from the company and who is a managing or whole-time director of the company shall not be disqualified from receiving any remuneration or commission from any holding company or subsidiary company of such company subject to its disclosure by the company in the Board’s report.	P	P
35	Rule 5 (2)	The Board report shall include statement showing the name of the top ten employees in terms of remuneration drawn and the name of every employees who : (i) if employed through out the FY, was in receipt of remuneration for that year which, in the aggregate, was not less than Rs. 1.02 Crores; (ii) if employed for a part of the FY, was in receipt of remuneration for any part of that year, at a rate which in the aggregate, was not less than Rs. 8.5 lakhs per month; (iii) if employed throughout the FY or part thereof, was in receipt of remuneration in that year which in the aggregate or as the case may be, at a rate which in aggregate is in excess of that drawn by MD/ WTD/ manager and holds by himself or along with his spouse and dependent children, not less than 2% of equity shares of the Company.	P
36	Rule 5 (3)	The above mentioned statement shall also indicate the following particulars of the employees - (i) designation of the employee; (ii) remuneration received; (iii) nature of employment, whether contractual or otherwise; (iv) qualifications and experience of the employee; (v) date of commencement of employment; (vi) the age of such employee; (vii) the last employment held by such employee before joining the company; (viii) the percentage of equity shares held by the employee in the company; and (ix) whether any such employee is a relative of any director or manager of the company and if so, name of such director or manager:	P
37	1st proviso to Rule 5 (3)	the particulars of employees posted and working in a country outside India, not being directors or their relatives, drawing more than Rs.60,00,000 per FY or Rs.5,00,000 per month, as the case may be, as may be decided by the Board, shall not be circulated to the members in the Board’s report, but such particulars shall be filed with the Registrar of Companies while filing the financial statement and Board Reports.	P
38	3rd proviso to Sec 131	Where the financial statement or Board's Report of the Company was revised in respect of any of the three preceding financial years after obtaining approval of the Tribunal, then, the detailed reasons for revision shall be disclosed, in the relevant FY in which such revision is being made.	P	P	P	P	P
39	Section 71 and para 3.6 of SS-4	Issue of debentures, bonds or any non-convertible securities	P	P	P				Disclosure regarding issue of debt securities shall be included in the Board Report which contains the following: ·  date of issue and allotment of the securities; ·  number of securities; ·  whether the issue of the securities was by way of preferential allotment, private placement or public issue; ·  brief details of the debt restructuring pursuant to which the securities are issued; ·  issue price; etc.
40	Sec 125 (2)	Investor Education and Protection Fund	P	P	P	P	P		As a good governance, inform the shareholders about the amounts, if any, which have been transferred during the year to the Investor Education and Protection Fund (IEPF) established under sub-section Sec 125 (2) of the Act and the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016. SS-3 on dividend requires that the Annual Report of the company should disclose the total amount lying in the Unpaid Dividend Account of the company in respect of the last 7 years and when such unpaid dividend is due for transfer to the Fund. SS-4 advises that the company should disclose the date and year of declaration of dividend and the amount to be transferred to the IEPF. The amount of Dividend, if any, transferred by the company to the IEPF during the year should also be disclosed.

 

ADDITIONAL COMPLIANCE FOR LISTED COMPANIES UNDER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REG, 2015

 

Reg24A. (1) Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex a secretarial audit report given by a company secretary in practice, in such form as specified, with the annual report of the listed entity.

 

(As per Reg 16 (1) (c) of Listing Regulations, “Material Subsidiary” shall mean a subsidiary, whose income or net worth exceeds 10% of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.)

 

Reg 32 (4):The listed entity shall furnish an explanation for the variation in in the use of proceeds from the objects stated in the offer document (for public issue, rights issue, preferential issue) or explanatory statement to the notice for the general meeting, in the directors’ report in the annual report.

 

(7A) Where an entity has raised funds through preferential allotment or qualified institutions placement, the listed entity shall disclose every year, the utilization of such funds during that year in its Annual Report until such funds are fully utilized.

 

Reg 34 (1)The listed entity shall submit to the stock exchange and publish on its website

(a) a copy of the annual report sent to the shareholders along with the notice of the annual general meeting not later than the day of commencement of dispatch to its shareholders;

(b) in the event of any changes to the annual report, the revised copy along with the details of and explanation for the changes shall be sent not later than 48 hours after the annual general meeting.

(2) The annual report shall contain the following:

a.   audited financial statements i.e. balance sheets, profit and loss accounts etc, and Statement on Impact of Audit Qualifications as stipulated in regulation 33(3)(d), if applicable;

b.   consolidated financial statements audited by its statutory auditors;

c.   cash flow statement presented only under the indirect method as prescribed in Accounting Standard-3 or Indian Accounting Standard 7, as applicable, specified in Section 133 of the Companies Act, 2013 read with relevant rules framed thereunder or as specified by the Institute of Chartered Accountants of India, whichever is applicable;

d.   directors report;

e.   management discussion and analysis report - either as a part of directors report or addition thereto;

f.    for the top 1000 listed entities based on market capitalization, a Business Responsibility and Sustainability Report on the environmental, social and governance disclosures, in the format as may be specified by the Board from time to time.

 

The assurance of the Business Responsibility and Sustainability Report Core shall be obtained, with effect from and in the manner as may be specified by the Board from time to time:

 

SEBI vide circular no SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated July 12, 2023 on the subject ie., BRSR  Core –Framework  for assurance  and ESG  disclosuresfor valuechain specified thatlisted entities shall mandatorily  undertake reasonable assurance of the BRSR Core, as per the details given in the following table:

 

Financial Year	Applicability of BRSR Core to top listed entities (by market capitalization)
2023 –24	Top 150 listed entities
2024 –25	Top 250 listed entities
2025 –26	Top 500 listed entities
2026 –27	Top 1000 listed entities

 

(3) The annual report shall contain any other disclosures specified in Companies Act, 2013 along with other requirements as specified in Schedule V of these regulations.

 

Reg 36. (1) The listed entity shall send the annual report in the following manner to theshareholders:

(a) Soft copies of full annual report to all those shareholder(s) who have registered their email address(es) either with the listed entity or with any depository];

(b) Hard copy of statement containing the salient features of all the documents, as prescribed in Section 136 of Companies Act, 2013 or rules made thereunder to those shareholder(s) who have not so registered;

(c) Hard copies of full annual reports to those shareholders, who request for the same.

 

(2)The listed entity shall send annual report referred to in sub-regulation(1), to the holders of securities, not less than twenty-one days before the annual general meeting.

 

Reg 43A Proviso to sub reg (2): if the listed entity proposes to declare dividend on the basis of parameters in addition to clauses (a) to (e) of Reg 43A (2) or proposes to change such additional parameters or the dividend distribution policy contained in any of the parameters, it shall disclose such changes along with the rationale for the same in its annual report and on its website.

 

Reg 46: The listed entity shall maintain a functional website inter-alia containing complete copy of the annual report including balance sheet, profit and loss account, directors report, corporate governance report etc;

Reg 56(1)(a): The listed entity shall forward the following to the debenture trustee promptly a copy of the annual report at the same time as it is issued along with a copy of certificate from the listed entity's auditors in respect of utilization of funds during the implementation period of the project for which the funds have been raised.

 

SCHEDULE V: (Regulation 34(3) and 53(f)])

 

A.  Related Party Disclosure:

·  The listed entities which has listed its non-convertible securities Disclosures in compliance with the Accounting Standard on “Related Party Disclosures.

·    The above disclosures shall be applicable to all listed entities except for listed banks.

·    Disclosures of transactions of the listed entity with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the listed entity, in the format prescribed in the relevant accounting standards for annual results.

 

B.  Management Discussion and Analysis

 

This section shall include discussion on the following matters within the limits set by the listed entity’s competitive position:

a.   Industry structure and developments.

b.   Opportunities and Threats.

c.   Segment–wise or product-wise performance.

d.   Outlook

e.   Risks and concerns.

f.    Internal control systems and their adequacy.

g.   Discussion on financial performance with respect to operational performance.

h.   Material developments in Human Resources / Industrial Relations front, including number of people employed.

i.    details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

(i) Debtors Turnover

(ii) Inventory Turnover

(iii) Interest Coverage Ratio

(iv) Current Ratio

(v) Debt Equity Ratio

(vi) Operating Profit Margin (%)

(vii) Net Profit Margin (%)

or sector-specific equivalent ratios, as applicable.

j. details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

 

C.  Disclosure of Accounting Treatment:

 

Where in the preparation of financial statements, a treatment different from that prescribed in an Accounting Standard has been followed, the fact shall be disclosed in the financial statements, together with the management’s explanation as to why it believes such alternative treatment is more representative of the true and fair view of the underlying business transaction.

 

D.    Corporate Governance Report: The following are the disclosures to be included in annual report.                       

·    A brief statement on listed entity’s philosophy on code of governance;

·    Board of directors and its compositions & its related disclosure;

·    Audit committee and its compositions & its related disclosure;

·    Nomination and Remuneration Committee and its compositions & its related disclosure;

·    Remuneration of Directors;

·    Stakeholders' grievance committee and its compositions & its related disclosure;

·    Risk management committee and its compositions & its related disclosure (applicable for top 1000 listed entity based on market cap):

·    Particulars of senior management including the changes therein since the close of the previous financial year.

·    Remuneration of directors and other matters connected thereto:

·    General body meetings and its related disclosure;

·    Means of communication of quarterly/ yearly results, website etc;

·    General shareholder information viz., AGM details, dividend payable date, name of stock exchanges in which shares of the Company is listedetc…;

·    Other Disclosures viz., disclosures on materially significant related party transactions including weblink of policy on material related party transaction & policy for determining material subsidiaries; details of non-compliance by the listed entity, penalties, strictures imposed by stock exchanges;details of vigil mechanism etc….;

·    Non-compliance of any requirement of corporate governance report as above along with reasons;

·    The corporate governance report on discretionary requirements as specified in Part E of Schedule II have been adopted;

·    The disclosures of the compliance with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of regulation 46 (2).

 

E.   Declaration signed by CEO stating that the members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management.

 

F.        Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall be annexed with the directors’ report.

 

G.    Disclosures with respect to de-mat suspense account/ unclaimed suspense account.

 H.    Disclosure of certain types of agreements binding listed entities(1) Information disclosed under clause 5A of paragraph A of Part A of Schedule III of these regulations.

 

PUNISHMENT FOR NON COMPLIANCE OF SEC 134

 

If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of Rs. 3 lakhs and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees

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