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DIRECTOR’S REPORT
DIRECTOR’S REPORT
Meaning
Directors’Report or
Board’s Report is a
comprehensive report
prepared by the Directors
to the Stakeholders of the
company intended to
provide both financial or
non-financial information
of the company including
its operations and
Business Scope
Applicability
Every Corporate Entity
including Private, Public
(Listed or Unlisted) and
Government Company
registered under the
Companies Act, 2013 is
obligated to prepare
Directors’ Report in
accordance with the
applicable provisions of
Section 134 and Secretarial
Standard (“SS”) – 4.
Basis of Preparation
• On the basis of Standalone
Financial Statements
• The report shall contain
separate Annexure
wherein a report on the
performance of its
• Subsidiary
Company
• Associate
Company
• Joint Venture
Company,
included in the
Consolidated Financial
Statements
Approval
The approval of the draft of
Directors’ Report shall be
done in Meeting of the Board
of Directors’ only and
therefore circulated
alongwith the notice of
Annual General Meeting and
Auditors’ Report.
Signing
• Chairman, or
• Any two Directors
including Managing
Director
DIRECTOR’S REPORT
Meaning
Directors’ Report or Board’s Report
is a comprehensive report prepared
by the Directors to the Stakeholders
of the company intended to provide
both financial or non-financial
information of the company
including its operations and
Business Scope
Applicability
Every Corporate Entity
including Private, Public
(Listed or Unlisted) and
Government Company
registered under the
Companies Act, 2013 is
obligated to prepare
Directors’Report in
accordance with the
applicable provisions of
Section 134 and
Secretarial Standard
(“SS”) – 4.
Basis of Preparation
• On the basis of Standalone
Financial Statements
• The report shall contain
separate Annexure
wherein a report on the
performance of its
• Subsidiary
Company
• Associate
Company
• Joint Venture
Company,
included in the
Consolidated Financial
Statements
Approval
The approval of the draft of
Directors’ Report shall be
done in Meeting of the Board
of Directors’ only and
therefore circulated
alongwith the notice of
Annual General Meeting and
Auditors’ Report.
Signing
• Chairman, or
• Any two Directors
including Managing
Director
DIRECTOR’S REPORT
Meaning
Directors’ Report or Board’s Report
is a comprehensive report prepared
by the Directors to the Stakeholders
of the company intended to provide
both financial or non-financial
information of the company
including its operations and
Business Scope
Applicability
Every Corporate Entity
including Private, Public
(Listed or Unlisted) and
Government Company
registered under the
Companies Act, 2013 is
obligated to prepare
Directors’ Report in
accordance with the
applicable provisions of
Section 134 and Secretarial
Standard (“SS”) – 4.
Basis of Preparation
• On the basis of Standalone
Financial Statements
• The report shall contain
separate Annexure wherein
a report on the
performance of its
• Subsidiary
Company
• Associate Company
• Joint Venture
Company,
included in the
Consolidated Financial
Statements
Approval
The approval of the draft of
Directors’ Report shall be
done in Meeting of the Board
of Directors’ only and
therefore circulated
alongwith the notice of
Annual General Meeting and
Auditors’ Report.
Signing
• Chairman, or
• Any two Directors
including Managing
Director
DIRECTOR’S REPORT
Meaning
Directors’ Report or Board’s Report
is a comprehensive report prepared
by the Directors to the Stakeholders
of the company intended to provide
both financial or non-financial
information of the company
including its operations and
Business Scope
Applicability
Every Corporate Entity
including Private, Public
(Listed or Unlisted) and
Government Company
registered under the
Companies Act, 2013 is
obligated to prepare
Directors’ Report in
accordance with the
applicable provisions of
Section 134 and Secretarial
Standard (“SS”) – 4.
Basis of Preparation
• On the basis of Standalone
Financial Statements
• The report shall contain
separate Annexure
wherein a report on the
performance of its
• Subsidiary
Company
• Associate
Company
• Joint Venture
Company,
included in the
Consolidated Financial
Statements
Approval
The approval of the draft
of Directors’Report shall
be done in Meeting of
the Board of Directors’
only and therefore
circulated alongwith the
notice of Annual General
Meeting and Auditors’
Report.
Signing
• Chairman, or
• Any two Directors
including Managing
Director
DIRECTOR’S REPORT
Meaning
Directors’ Report or Board’s Report
is a comprehensive report prepared
by the Directors to the Stakeholders
of the company intended to provide
both financial or non-financial
information of the company
including its operations and
Business Scope
Applicability
Every Corporate Entity
including Private, Public
(Listed or Unlisted) and
Government Company
registered under the
Companies Act, 2013 is
obligated to prepare
Directors’ Report in
accordance with the
applicable provisions of
Section 134 and Secretarial
Standard (“SS”) – 4.
Basis of Preparation
• On the basis of Standalone
Financial Statements
• The report shall contain
separate Annexure
wherein a report on the
performance of its
• Subsidiary
Company
• Associate
Company
• Joint Venture
Company,
included in the
Consolidated Financial
Statements
Approval
The approval of the draft of
Directors’ Report shall be
done in Meeting of the Board
of Directors’ only and
therefore circulated
alongwith the notice of
Annual General Meeting and
Auditors’ Report.
Signing
• Chairman, or
• Any two Directors
including Managing
Director
DISCLOSURES
The financial summary and highlights
thereof should be accompanied by the
macro-economic, geo-political, financial,
industry specific as well as any company
specific information affecting the business
of the company and the market in which it
operates, along with the industry
performance vis-à-vis the company’s
performance.
Financial Summary and Highlights
Rule 8 of Companies (Account) Rules,
2014
DISCLOSURES
Financial Summary and Highlights
Particulars Current Year Previous Year
Revenue from Operations
Other Income
Total Revenue (A)
Expenses (B)
Profit Before Tax (C) = (A) – (B)
Current Tax (D)
Proft After Tax (E) = (C) – (D)
Earnings Per Share
Note: Previous year’s figures have been regrouped/reclassified wherever
necessary to correspond with the current year’s classification/disclosure.
DISCLOSURES
The amount proposed to be transferred to
any reserves of the company.
If no amount is proposed to be transferred to
reserves, a statement to that effect shall be
included.
Amount, if any, which the Board
proposes to carry to any reserves
Section 134 (3) of the Companies Act,
2013
DISCLOSURES
Amount, if any, which the Board proposes to carry to any reserves
Example:
“The Board of Directors of your company, has decided not to
transfer any amount to the Reserves for the year under review.”
DISCLOSURES
The Board may recommend the dividend to be declared by the Members at the Annual
General Meeting in accordance with the dividend distribution policy of the company, if
any. Unless the Dividend has been recommended by the Board, Members in the
Annual General Meeting cannot on their own declare any Dividend.
Dividend
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
“The Board of Directors of your company is pleased to recommend a dividend of Rs. ______
per equity share of the face value of Rs. ______ each (@____%), payable to those
Shareholders whose names appear in the Register of Members as on the Book Closure / Record
Date.
An amount of Rs…… would be paid as dividend distribution tax on the dividend.
The dividend pay-out is in accordance with the company’s dividend distribution policy.”
Illustration
(In case the Dividend is
recommended by the Board)
Dividend
DISCLOSURES
“The Board of Directors of your company, after considering holistically the
relevant circumstances and keeping in view the company’s dividend distribution
policy, has decided that it would be prudent, not to recommend any Dividend for
the year under review.”
Illustration
(In case no Dividend is
recommended by the Board)
Dividend
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Example:
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
ii. Change in the status of the business of the company
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
ii. Change in the nature of the business of the company
iii. Key business developments
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
ii. Change in the nature of the business of the company
iii. Key business developments
iv. Change in the Financial Year
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
ii. Change in the nature of the business of the company
iii. Key business developments
iv. Change in the Financial Year
v. capital expenditure programmes;
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
ii. Change in the nature of the business of the company
iii. Key business developments
iv. Change in the Financial Year
v. capital expenditure programmes;
vi. details and status of acquisition, merger, expansion, modernization and
diversification;
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
ii. Change in the nature of the business of the company
iii. Key business developments
iv. Change in the Financial Year
v. capital expenditure programmes;
vi. details and status of acquisition, merger, expansion, modernization and
diversification;
vii. developments, acquisition and assignment of material Intellectual Property
Rights;
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
i. segment-wise or product-wise position of business and its operations;
ii. Change in the nature of the business of the company
iii. Key business developments
iv. Change in the Financial Year
v. capital expenditure programmes;
vi. details and status of acquisition, merger, expansion, modernization and
diversification;
vii. developments, acquisition and assignment of material Intellectual Property
Rights;
viii. any other material event having an impact on the affairs of the company.
STATE OF THE COMPANY’S
AFFAIRS
Section 134 (3) of the Companies Act, 2013
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
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. It is mandatory disclose in its report even if there are no changes in the nature of
business of the company.
CHANGE IN THE NATURE OF BUSINESS
Sub-Rule (5)(ii) of Rule 8 of Companies (Accounts) Rules, 2014
Example: “There is no change in the nature of the business of the company
for the year under review, which s primarily _____________________”
Source: Annual Report of Godrej (FY 2022-23)
DISCLOSURES
The company is required to disclose material changes and commitments, if any,
affecting the financial position of the company which have occurred between the end of
the financial year and the date of the Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY,
AFFECTING THE FINANCIAL POSITION OF THE COMPANY,
HAVING OCCURRED SINCE THE END OF THE YEAR AND
TILL THE DATE OF THE REPORT
Source: Annual Report of Godrej (FY 2022-23)
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
MATERIAL CHANGES AND COMMITMENTS, IF ANY,
AFFECTING THE FINANCIAL POSITION OF THE COMPANY,
HAVING OCCURRED SINCE THE END OF THE YEAR AND
TILL THE DATE OF THE REPORT
Example:
If there are material changes and commitments but their impact on the financial
position is not determinable, a statement should be disclosed in the Report as
under :
“Following material changes and commitments have occurred between the end of the
financial year to which the financial statements relate and the date of this Report and
their impact on financial position of the company is not determinable.
(i) …………………
(ii) ………………..
(iii) ………………..
The causes for such material changes and commitment as stated above and remedial
measures taken by the company are given below:
(i) …………………
(ii) ………………..
(iii) ………………..”
Source: Annual Report of Godrej (FY 2022-23)
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
MATERIAL CHANGES AND COMMITMENTS, IF ANY,
AFFECTING THE FINANCIAL POSITION OF THE COMPANY,
HAVING OCCURRED SINCE THE END OF THE YEAR AND
TILL THE DATE OF THE REPORT
Example:
If there are no such material changes and commitments affecting the financial
position of the company, a statement should be disclosed in the Report as under :
“There have been no material changes and commitments, which affect the
financial position of the company which have occurred between the end of
the financial year to which the financial statements relate and the date of
this Report.”
Source: Annual Report of Godrej (FY 2022-23)
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
CAPITAL STRUCTURE
• SHARE CAPITAL
In case the company has not issued any shares or had not made any allotment during
the year under review:
“During the financial year under review, the company did not issue any
shares. The paid up share capital of the company as on March 31, 202___
[Closing Period] is INR ______________ consisting
______________[number of shares] of INR ____ [face value] each.
There is no change in the authorised, issued, subscribed and paid-up share
capital of the company during the financial year 2022-23.”
Source: Annual Report of Godrej (FY 2022-23)
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
CAPITAL STRUCTURE
• SHARE CAPITAL
In case the company has not issued any shares or had not made any allotment during
the year under review:
“During the financial year under review, the company did not issue any
shares. The paid up share capital of the company as on March 31, 202___
[Closing Period] is INR ______________ consisting
______________[number of shares] of INR ____ [face value] each.
There is no change in the authorised, issued, subscribed and paid-up share
capital of the company during the financial year 2022-23.”
• EMPLOYEE STOCK OPTION (ESOP)
Example:
“During the financial year 2022-23, the company did not issue any
Employee Stock Options (ESOPs) as a part of any compensation and equity
incentive programs.”
Source: Annual Report of Godrej (FY 2022-23)
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
CAPITAL STRUCTURE
• SWEAT EQUITY SHARES
Example:
“During the financial year 2022-23, the company did not issue any Sweat
Equity Shares maintaining its capital structure unchanged from the previous
year.”
• EMPLOYEE STOCK OPTION (ESOP)
Example:
“During the financial year 2022-23, the company did not issue any
Employee Stock Options (ESOPs) as a part of any compensation and equity
incentive programs.”
Source: Annual Report of Godrej (FY 2022-23)
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
CAPITAL STRUCTURE
• SWEAT EQUITY SHARES
Example:
“During the financial year 2022-23, the company did not issue any Sweat
Equity Shares maintaining its capital structure unchanged from the previous
year.”
• BONUS SHARES
Example:
“During the financial year 2022-23, the company did not issue any Bonus
Shares maintaining its existing capital structure.”
Source: Annual Report of Godrej (FY 2022-23)
Section 134 (3) of the Companies Act, 2013
DISCLOSURES
MANAGEMENT – DIRECTORS AND KEY MANAGERIAL PERSONNEL
Source: Annual Report of Godrej (FY 2022-23)
Rule 8(5) of Companies (Accounts) Rules, 2014
The company in its Board’s report is required to reflect the change in composition of
the Board of Directors and KMP (CEO, CFO and CS) during the year under review.
As a measure of good corporate governance practice, the Secretarial Standard has
extended the disclosure requirement to include the persons who have been appointed
/ceased to be Directors and/or Key Managerial Personnel of the company after the end
of the year and up to the date of the Report.
In addition, the Standard also requires that the mode of such appointment/cessation
should also be disclosed in the Report. Mode of appointment may be by the Board, by
the shareholders or by way of Nomination as the case may be. Mode of cessation may
be by way of resignation, vacation, death, retirement or removal as the case may be.
DISCLOSURES
INDEPENDENT DIRECTORS
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (10) of section 149 of the Companies Act, 2013
The disclosure shall include the following:
a) in case of appointment of Independent Directors, the justification for
choosing the proposed appointees for appointment as Independent
Directors; and
b) in case of re-appointment after completion of the first term, the rationale
for such re-appointment.
DISCLOSURES
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (6) of section 149 of the Companies Act, 2013
The Report shall include a statement:
a) that necessary declaration under section 149(7) of the Companies Act,
2013 with respect to the criteria of independence laid down in section
149(6) of the Companies Act, 2013 has been received from all the
Independent Directors of the company;
b) that the Independent Directors have complied with the Code for
Independent Directors prescribed in Schedule IV to the Act.
DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT
ON COMPLIANCE OF CODE OF CONDUCT
DISCLOSURES
BOARD MEETINGS
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 of the Companies Act, 2013
The Report shall include the number of meetings of the Board held during
the year.
DISCLOSURES
BOARD MEETINGS
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 of the Companies Act, 2013
The Report shall include the number of meetings of the Board held during
the year.
Example:
“During the financial year 202__-2__, ___ [number of meetings] meetings
of the Board of Directors were held on __________, 20__, _______, 202__,
________, 202__, and _________, 202__. The interval between two
meetings do not exceed 120 days.”
DISCLOSURES
COMMITTEE
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (8) of section 177 of the Companies Act, 2013
Sub-section (2) of section 135 of the Companies Act, 2013
The Report shall disclose:
a) Composition of Committees constituted by the Board under the Act and
the Listing Regulations as well as changes in their composition, if any,
during the year;
b) The number and dates of meetings of such committees held during the
year.
The Standard requires the disclosure of composition of all committees
constituted by the Board under the Act and the Listing Regulations. Further,
the changes in the composition of such committees during the year should
also be disclosed in the Report.
DISCLOSURES
POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 read with proviso to sub-section (4) of
section 178 of the Companies Act, 2013
The Report shall disclose company’s policy on directors’ appointment and
remuneration and the criteria for determining qualifications, positive
attributes and independence of a Director. Where the said policy is available
on the website of the company, it would be sufficient to disclose salient
features of such policy, any change therein and the web-link at which the
complete policy is available.
DISCLOSURES
POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 read with proviso to sub-section (4) of
section 178 of the Companies Act, 2013
The Report shall disclose company’s policy on directors’ appointment and
remuneration and the criteria for determining qualifications, positive
attributes and independence of a Director. Where the said policy is available
on the website of the company, it would be sufficient to disclose salient
features of such policy, any change therein and the web-link at which the
complete policy is available.
Example:
“The policy on the Directors’ appointment and remuneration and other
matters provided in Section 178(3) of the Companies Act, 2013 have been
revised/approved by the Board of Directors of the Company in its Board
Meeting held on _____, 202__. The Nomination and Remuneration Policy
is also available on the company’s website at _______________. The said
policy ensures that:
1. __________
2. __________”
DISCLOSURES
BOARD EVALUATION
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 the Companies Act, 2013
The Report of every listed company and other prescribed class of public
companies shall include a statement indicating the manner in which formal
annual evaluation of the performance of the Board, its Committees and of
Individual Directors has been made.
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.
The best practice to evaluate the performance of every individual directors
that the evaluation shall be done by the entire Board of Directors, excluding
the director being evaluated one by one.
DISCLOSURES
DIRECTORS’ RESPONSIBILITY STATEMENT
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 the Companies Act, 2013
The Report shall include a Directors’ Responsibility Statement stating the
following:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b) the Directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
company at the end of the year and of the profit and loss of the company
for that period;
c) the Directors had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the company and for preventing and
detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern
basis;
e) the Directors had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and
operating effectively;
DISCLOSURES
INTERNAL FINANCIAL CONTROLS
Source: Annual Report of Godrej (FY 2022-23)
Rule (8)(5) of the Companies (Accounts) Rules, 2014
The Report shall contain the details in respect of adequacy of internal
financial controls with reference to the financial statements.
DISCLOSURES
INTERNAL FINANCIAL CONTROLS
Source: Annual Report of Godrej (FY 2022-23)
Rule (8)(5) of the Companies (Accounts) Rules, 2014
The Report shall contain the details in respect of adequacy of internal
financial controls with reference to the financial statements.
Example:
“Internal Financial Controls are an integrated part of the risk management
process, addressing financial and financial reporting risks. The Board has
adopted policies and procedures for ensuring the orderly and efficient
conduct of its business, including adherence to the Company’s policies,
safeguarding of its assets, prevention and detection of fraud, error reporting
mechanism, accuracy and completeness of the accounting records and
timely preparation of reliable financial disclosure.”
DISCLOSURES
FRAUD’S REPORT
Source: Annual Report of Godrej (FY 2022-23)
Section 143(12) of the Companies Act, 2013
The details in respect of frauds reported by auditors under sub-section (12)
of section 143 other than those which are reportable to the Central
Government, shall be disclosed in the Report.
DISCLOSURES
FRAUD’S REPORT
Source: Annual Report of Godrej (FY 2022-23)
Section 143(12) of the Companies Act, 2013
The details in respect of frauds reported by auditors under sub-section (12)
of section 143 other than those which are reportable to the Central
Government, shall be disclosed in the Report.
Example: In case no fraud reported
“During the year under review, no auditor has reported to the Audit Committee or
the Board of Directors, under Section 143(12) of the Companies Act, 2013, any
instances of fraud committed against the Company by its officers or employees.”
DISCLOSURES
FRAUD’S REPORT
Source: Annual Report of Godrej (FY 2022-23)
Section 143(12) of the Companies Act, 2013
The details in respect of frauds reported by auditors under sub-section (12)
of section 143 other than those which are reportable to the Central
Government, shall be disclosed in the Report.
In case of fraud reported to the Audit Committee and the Board, the
following disclosure shall be made in the report for each fraud:
• Nature of Fraud with description;
• Approximate Amount involved;
• Parties involved, if remedial action not taken; and
• Remedial actions taken.
DISCLOSURES
RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Source: Annual Report of Godrej (FY 2022-23)
Rule 8(1) of the Companies (Accounts) Rules, 2014
In case of companies having Subsidiaries, Associates and Joint Ventures, the
Report shall include a separate section highlighting the performance of each
of the Subsidiaries, Associates and Joint venture companies and their
contribution to the overall performance of the company.
Report on performance and financial position of the Subsidiaries,
associates and Joint Ventures
DISCLOSURES
RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Source: Annual Report of Godrej (FY 2022-23)
Rule 8(1) of the Companies (Accounts) Rules, 2014
In case of companies having Subsidiaries, Associates and Joint Ventures, the
Report shall include a separate section highlighting the performance of each
of the Subsidiaries, Associates and Joint venture companies and their
contribution to the overall performance of the company.
Example:
“The Company is presently having __________[no. of subsidiaries with
name]. In accordance with Section 129(3) of the Companies Act, 2013, we
have prepared consolidated financial statements of the Company, which
forms part of our Financial Statements.
Further, a statement containing the salient features of the financial
statement of our wholly owned subsidiary companies in the prescribed
form AOC-1 is enclosed as “Annexure A”.”
Report on performance and financial position of the Subsidiaries,
associates and Joint Ventures
DISCLOSURES
RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Source: Annual Report of Godrej (FY 2022-23)
Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014
The Report shall contain the names of companies which have become or
ceased to be its subsidiaries, joint ventures or associate companies during
the year.
Companies which have become or ceased to be subsidiaries,
associates and joint ventures
DISCLOSURES
RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Source: Annual Report of Godrej (FY 2022-23)
Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014
The Report shall contain the names of companies which have become or
ceased to be its subsidiaries, joint ventures or associate companies during
the year.
Example:
“During the financial year 2022-23, the company has incorporated __
wholly or partly-owned subsidiary/associate/joint venture companies on
________, 202__. The details are as follows:
• Subsidiary/Associate/Joint Venture Company 1 – [Brief Main Objects
of the Company]
• Subsidiary/Associate/Joint Venture Company 2 – [Brief Main Objects
of the Company]
• Subsidiary/Associate/Joint Venture Company 3 – [Brief Main Objects
of the Company]”
Companies which have become or ceased to be subsidiaries,
associates and joint ventures
DISCLOSURES
DEPOSITS
Source: Annual Report of Godrej (FY 2022-23)
Rule 8(5)(v) of Companies (Accounts) Rules, 2014 and Rule
2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014
The disclosure shall include the details of deposit accepted during the
year. In case of Private Company, details of amount received from a
person who at the time of the receipt of the amount was a Director of
the company or relative of the Director of the company.
DISCLOSURES
DEPOSITS
Source: Annual Report of Godrej (FY 2022-23)
Rule 8(5)(v) of Companies (Accounts) Rules, 2014 and Rule
2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014
Example:
“The Company has not accepted any deposits from the public in terms of
applicable laws under Companies Act, 2013 and as such, no amount on
account of principal or interest on deposits from public was outstanding
as on the date.
During the year under review, Company has received the amount of INR
______________ (repaid during the year) from Mr. _________, [Name of
Director].
Furthermore, the company has received a declaration in writing to the
effect from the directors that the amount is not being given out of funds
acquired by her by borrowing or accepting loans or deposits from others
which doesn’t consider as Deposits under the Companies Act, 2013.”
DISCLOSURES
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 of the Companies Act, 2013
The particulars of loans, guarantees or investments under section 186 shall
be disclosed in the Report.
As a matter of good corporate governance practice, the Standard requires
that along with the particulars of the loans given, investments made,
guarantees given or securities provided during the year by the company,
the purpose for which such loans/guarantees/securities are proposed to be
utilized by the recipient should also be disclosed in the Report.
A company shall disclose the aforesaid particulars in the notes to the
financial statement and give reference thereof in the Report.
DISCLOSURES
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 of the Companies Act, 2013
Example:
“The particulars of loans, guarantees and investments, as required under
Section 186 of the Act and Schedule V of the Listing Regulations, have
been disclosed under Note no. _______ of the financial statements for FY
202__-2__.”
DISCLOSURES
PARTICULARS OF CONTRACTS, ARRANGEMENTS WITH
RELATED PARTIES
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 of the Companies Act, 2013
Rule 8(2) of Companies (Accounts) Rules, 2014
Sub-section (2) of section 188 of the Companies Act, 2013
The disclosure shall include the following:
a) contracts / arrangements / transactions with related parties which are
not at arm’s length basis;
b) material contracts / arrangements / transactions with related parties
which are at arm’s length basis;
c) contracts / arrangements with related parties which are not in the
ordinary course of business and justification for entering into such
contract.
DISCLOSURES
PARTICULARS OF CONTRACTS, ARRANGEMENTS WITH
RELATED PARTIES
Source: Annual Report of Godrej (FY 2022-23)
Sub-section (3) of section 134 of the Companies Act, 2013
Rule 8(2) of Companies (Accounts) Rules, 2014
Sub-section (2) of section 188 of the Companies Act, 2013
The disclosure shall include the following:
a) contracts / arrangements / transactions with related parties which are
not at arm’s length basis;
b) material contracts / arrangements / transactions with related parties
which are at arm’s length basis;
c) contracts / arrangements with related parties which are not in the
ordinary course of business and justification for entering into such
contract.
Form AOC-2 to be enclosed as Annexure
DISCLOSURES
CORPORATE SOCIAL RESPONSIBILITY
Source: Annual Report of Godrej (FY 2022-23)
Rule 9 of the Companies (Accounts) Rules, 2014
The Report shall include an Annual Report on the CSR activities and shall
comprise the following:
a) a brief outline of the CSR Policy, including overview of projects or
programs proposed to be undertaken and a reference to the web link to
the CSR Policy and projects or programs;
DISCLOSURES
CORPORATE SOCIAL RESPONSIBILITY
Source: Annual Report of Godrej (FY 2022-23)
Rule 9 of the Companies (Accounts) Rules, 2014
The Report shall include an Annual Report on the CSR activities and shall
comprise the following:
a) a brief outline of the CSR Policy, including overview of projects or
programs proposed to be undertaken and a reference to the web link to
the CSR Policy and projects or programs;
Example:
“During the financial year, the Company has started several projects in
view of its responsibility towards the masses. CSR activities are being
implemented in project and program mode, in areas or subjects specified
in Schedule VII of the Act, in the areas of education and health care,
poverty, sanitation etc., in the periphery of project areas of the company
(local area).”
DISCLOSURES
CORPORATE SOCIAL RESPONSIBILITY
Source: Annual Report of Godrej (FY 2022-23)
Rule 9 of the Companies (Accounts) Rules, 2014
The Report shall include an Annual Report on the CSR activities and shall
comprise the following:
a) a brief outline of the CSR Policy, including overview of projects or
programs proposed to be undertaken and a reference to the web link to
the CSR Policy and projects or programs;
Example:
“Brief Outline of Company’s CSR Policy
The company’s CSR policy establishes a transparent monitoring
mechanism for the implementation of CSR activities, primarily through
the establishment of the CSR Committee. These initiatives align with the
core focus areas of the _______, encompassing Education, Healthcare,
Eradicating Hunger, Animal Welfare, Environment Sustainability,
Livelihood Enhancement, and Community Upliftment, among others.”
DISCLOSURES
CORPORATE SOCIAL RESPONSIBILITY
Source: Annual Report of Godrej (FY 2022-23)
Rule 9 of the Companies (Accounts) Rules, 2014
The Report shall include an Annual Report on the CSR activities and shall
comprise the following:
b) composition of the CSR Committee, number of meetings held during
the year;
Example:
“Composition of the CSR Committee
The composition of the CSR Committee as on March 31, 20__ is as under:
CSR Committee
Member
Designation No. of Meetings
to attend
No. of Meetings
attended
Name 1 Chairman
Name 2 Member
DISCLOSURES
CORPORATE SOCIAL RESPONSIBILITY
Source: Annual Report of Godrej (FY 2022-23)
Rule 9 of the Companies (Accounts) Rules, 2014
The Report shall include an Annual Report on the CSR activities and shall
comprise the following:
c) average net profits for the three immediately preceding years;
d) prescribed CSR expenditure i.e. two percent of clause (c) above;
e) details of amount spent on CSR during the year including total amount
to be spent, amount unspent and manner in which the amount has been
spent;
f) in case the prescribed CSR amount has not been spent, reasons for not
spending the same;
g) a responsibility statement from the CSR Committee that the
implementation and monitoring of the CSR Policy is in compliance
with the CSR objectives and policy of the company.
DISCLOSURES
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO
Rule 134(3) of the Companies Act, 2013
The Report shall include:
CONSERVATION OF ENERGY
i. the steps taken or impact on conservation of energy;
ii. the steps taken by the company for utilising alternate sources of
energy;
iii. the capital investment on energy conservation equipmen
A separate Annexure to be enclosed in
the Report
DISCLOSURES
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO
Rule 134(3) of the Companies Act, 2013
The Report shall include:
TECHNOLOGY ABSORPTION
i. Efforts made towards technology absorption;
ii. Benefits derived like product improvement, cost reduction, product
development or import substitution;
iii. in case of imported technology (imported during the last three years
reckoned from the beginning of the year under reference) –
a) details of the technology imported;
b) the year of import;
c) whether the technology has been fully absorbed and if not,
areas where absorption has not taken place, and the reasons
thereof;
iv. the expenditure incurred on Research and Development.
A separate Annexure to be enclosed in
the Report
DISCLOSURES
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO
Rule 134(3) of the Companies Act, 2013
The Report shall include:
FOREIGN EXCHANGE EARNINGS AND OUTGOINGS
S. No. Particulars Amount
1 Foreign Exchange earned in terms
of actual inflows during the year
2 Foreign Exchange outgo during the
year in terms of actual outflows
A separate Annexure to be enclosed in
the Report
DISCLOSURES
RISK MANAGEMENT PROCESS
Section 134(3) of the Companies Act, 2013
The Report shall include:
A statement indicating development and implementation of a risk
management policy for the company including identification therein
elements of risk, if any, which in the opinion of the Board may threaten
the existence of the company, shall be included in the Report.
In addition, as a matter of good corporate governance practice, the
Standard provides that the strategy to mitigate such risks should also be
disclosed in the Report.
A separate Annexure to be enclosed in
the Report
DISCLOSURES
VIGIL MECHANISM
Sub-section (9) of section 177 of the Act read with Rule 7 of the Companies
(Meetings of Board and its Powers) Rules, 2014
The disclosure shall, inter alia, include the mechanism for:
a) the Directors and employees to report their genuine concerns about
unethical behaviour, actual or suspected fraud or violation of the
company’s code of conduct;
b) providing adequate safeguards against victimisation;
c) providing direct access to the higher levels of supervisors and/or to the
Chairman of the Audit Committee, in appropriate or exceptional cases.
No. of Complaints received in this regard shall also be reported.
Web Link where policy is available shall
also be reported.
DISCLOSURES
MATERIAL ORDERS OF JUDICIAL BODIES/REGULATORS
Rule 8(5)(vii) of Companies (Accounts) Rules, 2014
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.
DISCLOSURES
MATERIAL ORDERS OF JUDICIAL BODIES/REGULATORS
Rule 8(5)(vii) of Companies (Accounts) Rules, 2014
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.
Example:
“During the Financial Year 2022-23 and thereafter till the date of this
Report, there were no significant and material orders passed by the
regulators or Courts or Tribunals which can adversely impact the going
concern status of your Company and its operations in future.”
DISCLOSURES
AUDITOR
Section 134(3) of the Companies Act, 2013
Names of the
• Statutory Auditor,
• Cost Auditor and
• Secretarial Auditor
and details of any change in such Auditors, during the year and up to the
date of the Report due to resignation / casual vacancy / removal /
completion of term shall be disclosed in the Report.
DISCLOSURES
SECRETARIAL AUDIT REPORT
Sub-section (1) of section 204 of the Companies Act, 2013
Form MR-3 (Secretarial Audit Report) shall be annexed with the report
DISCLOSURES
EXPLANATIONS IN RESPONSE TO AUDITORS’ QUALIFICATIONS
Sub-section (3) of section 204 and Sub-section (3) of section 134 of the
Companies Act, 2013
The Board should state detailed explanation for all the observations and
qualifications given by the auditor in his audit report and in the notes attached to
the financial statement sheet including the reasons for such material deviations
and reasons that led to such deviations. If the auditors’ report involves a
debatable point on which differences of opinion has arisen, the Board should
give full explanation about the same in its report. The Board’s Report may also
contain a confirmation of the follow-up action taken by the directors on the
qualifications made in accounts for previous years.
DISCLOSURES
COMPLIANCE WITH SECRETARIAL STANDARDS
Paragraph 9 of Secretarial Standard on Meetings of the Board of Directors (SS-
1)
The Report shall include a statement on compliance of applicable Secretarial
Standards and other Secretarial Standards voluntarily adopted by the company.
DISCLOSURES
CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED
UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC)
The status of corporate insolvency resolution process, if any, initiated under
the IBC also needs to be disclosed in the Report.
Section 134(3) of the Companies Act, 2013
DISCLOSURES
ANNUAL RETURN
A copy of the annual return shall be placed on the website of the company, if
any, and the web-link of such annual return shall be disclosed in the Report.
(Section 92(3))
Section 134(3) and section 92(3) of the Companies Act, 2013
DISCLOSURES
ANNUAL RETURN
A copy of the annual return shall be placed on the website of the company, if
any, and the web-link of such annual return shall be disclosed in the Report.
(Section 92(3))
Section 134(3) and section 92(3) of the Companies Act, 2013
Form MGT-9 (Annual Return) shall be enclosed on the website of the
Company.
OTHER DISCLOSURES
DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF
WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013
Rule 8(5) of the Companies (Accounts) Rules, 2014
Sexual Harassment of Women at the Workplace (Prevention, Prohibition and
Redressal) Act, 2013
Disclosures pertaining to the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013, in the Corporate Governance
Report:
i. number of complaints filed during the financial year;
ii. number of complaints disposed of during the financial year;
iii. number of complaints pending as at the end of the financial year.
FILING
DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF
WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013
Rule 8(5) of the Companies (Accounts) Rules, 2014
Sexual Harassment of Women at the Workplace (Prevention, Prohibition and
Redressal) Act, 2013
Disclosures pertaining to the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013, in the Corporate Governance
Report:
i. number of complaints filed during the financial year;
ii. number of complaints disposed of during the financial year;
iii. number of complaints pending as at the end of the financial year.
FILING AND SUBMISSION
OF THE REPORT
The resolution passed by
the Board approving such
Report shall also be filed
with the Registrar of
Companies.
• Form MGT-14
• Within 30 days of the
Board Meeting
FILING AND SUBMISSION
OF THE REPORT
The Report along with the
audited financial
statement (Standalone &
Consolidated) of the
company shall be filed
with the Registrar of
Companies.
• Form AOC-4
• Within 30 days of the
Annual General
Meeting
THANK YOU
Neha Sagar

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Comprehensive Guide on Drafting Directors' Report and its ROC Compliances under the Companies Act, 2013

  • 2. DIRECTOR’S REPORT Meaning Directors’Report or Board’s Report is a comprehensive report prepared by the Directors to the Stakeholders of the company intended to provide both financial or non-financial information of the company including its operations and Business Scope Applicability Every Corporate Entity including Private, Public (Listed or Unlisted) and Government Company registered under the Companies Act, 2013 is obligated to prepare Directors’ Report in accordance with the applicable provisions of Section 134 and Secretarial Standard (“SS”) – 4. Basis of Preparation • On the basis of Standalone Financial Statements • The report shall contain separate Annexure wherein a report on the performance of its • Subsidiary Company • Associate Company • Joint Venture Company, included in the Consolidated Financial Statements Approval The approval of the draft of Directors’ Report shall be done in Meeting of the Board of Directors’ only and therefore circulated alongwith the notice of Annual General Meeting and Auditors’ Report. Signing • Chairman, or • Any two Directors including Managing Director
  • 3. DIRECTOR’S REPORT Meaning Directors’ Report or Board’s Report is a comprehensive report prepared by the Directors to the Stakeholders of the company intended to provide both financial or non-financial information of the company including its operations and Business Scope Applicability Every Corporate Entity including Private, Public (Listed or Unlisted) and Government Company registered under the Companies Act, 2013 is obligated to prepare Directors’Report in accordance with the applicable provisions of Section 134 and Secretarial Standard (“SS”) – 4. Basis of Preparation • On the basis of Standalone Financial Statements • The report shall contain separate Annexure wherein a report on the performance of its • Subsidiary Company • Associate Company • Joint Venture Company, included in the Consolidated Financial Statements Approval The approval of the draft of Directors’ Report shall be done in Meeting of the Board of Directors’ only and therefore circulated alongwith the notice of Annual General Meeting and Auditors’ Report. Signing • Chairman, or • Any two Directors including Managing Director
  • 4. DIRECTOR’S REPORT Meaning Directors’ Report or Board’s Report is a comprehensive report prepared by the Directors to the Stakeholders of the company intended to provide both financial or non-financial information of the company including its operations and Business Scope Applicability Every Corporate Entity including Private, Public (Listed or Unlisted) and Government Company registered under the Companies Act, 2013 is obligated to prepare Directors’ Report in accordance with the applicable provisions of Section 134 and Secretarial Standard (“SS”) – 4. Basis of Preparation • On the basis of Standalone Financial Statements • The report shall contain separate Annexure wherein a report on the performance of its • Subsidiary Company • Associate Company • Joint Venture Company, included in the Consolidated Financial Statements Approval The approval of the draft of Directors’ Report shall be done in Meeting of the Board of Directors’ only and therefore circulated alongwith the notice of Annual General Meeting and Auditors’ Report. Signing • Chairman, or • Any two Directors including Managing Director
  • 5. DIRECTOR’S REPORT Meaning Directors’ Report or Board’s Report is a comprehensive report prepared by the Directors to the Stakeholders of the company intended to provide both financial or non-financial information of the company including its operations and Business Scope Applicability Every Corporate Entity including Private, Public (Listed or Unlisted) and Government Company registered under the Companies Act, 2013 is obligated to prepare Directors’ Report in accordance with the applicable provisions of Section 134 and Secretarial Standard (“SS”) – 4. Basis of Preparation • On the basis of Standalone Financial Statements • The report shall contain separate Annexure wherein a report on the performance of its • Subsidiary Company • Associate Company • Joint Venture Company, included in the Consolidated Financial Statements Approval The approval of the draft of Directors’Report shall be done in Meeting of the Board of Directors’ only and therefore circulated alongwith the notice of Annual General Meeting and Auditors’ Report. Signing • Chairman, or • Any two Directors including Managing Director
  • 6. DIRECTOR’S REPORT Meaning Directors’ Report or Board’s Report is a comprehensive report prepared by the Directors to the Stakeholders of the company intended to provide both financial or non-financial information of the company including its operations and Business Scope Applicability Every Corporate Entity including Private, Public (Listed or Unlisted) and Government Company registered under the Companies Act, 2013 is obligated to prepare Directors’ Report in accordance with the applicable provisions of Section 134 and Secretarial Standard (“SS”) – 4. Basis of Preparation • On the basis of Standalone Financial Statements • The report shall contain separate Annexure wherein a report on the performance of its • Subsidiary Company • Associate Company • Joint Venture Company, included in the Consolidated Financial Statements Approval The approval of the draft of Directors’ Report shall be done in Meeting of the Board of Directors’ only and therefore circulated alongwith the notice of Annual General Meeting and Auditors’ Report. Signing • Chairman, or • Any two Directors including Managing Director
  • 7. DISCLOSURES The financial summary and highlights thereof should be accompanied by the macro-economic, geo-political, financial, industry specific as well as any company specific information affecting the business of the company and the market in which it operates, along with the industry performance vis-à-vis the company’s performance. Financial Summary and Highlights Rule 8 of Companies (Account) Rules, 2014
  • 8. DISCLOSURES Financial Summary and Highlights Particulars Current Year Previous Year Revenue from Operations Other Income Total Revenue (A) Expenses (B) Profit Before Tax (C) = (A) – (B) Current Tax (D) Proft After Tax (E) = (C) – (D) Earnings Per Share Note: Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.
  • 9. DISCLOSURES The amount proposed to be transferred to any reserves of the company. If no amount is proposed to be transferred to reserves, a statement to that effect shall be included. Amount, if any, which the Board proposes to carry to any reserves Section 134 (3) of the Companies Act, 2013
  • 10. DISCLOSURES Amount, if any, which the Board proposes to carry to any reserves Example: “The Board of Directors of your company, has decided not to transfer any amount to the Reserves for the year under review.”
  • 11. DISCLOSURES The Board may recommend the dividend to be declared by the Members at the Annual General Meeting in accordance with the dividend distribution policy of the company, if any. Unless the Dividend has been recommended by the Board, Members in the Annual General Meeting cannot on their own declare any Dividend. Dividend Section 134 (3) of the Companies Act, 2013
  • 12. DISCLOSURES “The Board of Directors of your company is pleased to recommend a dividend of Rs. ______ per equity share of the face value of Rs. ______ each (@____%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure / Record Date. An amount of Rs…… would be paid as dividend distribution tax on the dividend. The dividend pay-out is in accordance with the company’s dividend distribution policy.” Illustration (In case the Dividend is recommended by the Board) Dividend
  • 13. DISCLOSURES “The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the company’s dividend distribution policy, has decided that it would be prudent, not to recommend any Dividend for the year under review.” Illustration (In case no Dividend is recommended by the Board) Dividend
  • 14. DISCLOSURES i. segment-wise or product-wise position of business and its operations; STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Example: Source: Annual Report of Godrej (FY 2022-23)
  • 15. DISCLOSURES i. segment-wise or product-wise position of business and its operations; ii. Change in the status of the business of the company STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Source: Annual Report of Godrej (FY 2022-23)
  • 16. DISCLOSURES i. segment-wise or product-wise position of business and its operations; ii. Change in the nature of the business of the company iii. Key business developments STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Source: Annual Report of Godrej (FY 2022-23)
  • 17. DISCLOSURES i. segment-wise or product-wise position of business and its operations; ii. Change in the nature of the business of the company iii. Key business developments iv. Change in the Financial Year STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Source: Annual Report of Godrej (FY 2022-23)
  • 18. DISCLOSURES i. segment-wise or product-wise position of business and its operations; ii. Change in the nature of the business of the company iii. Key business developments iv. Change in the Financial Year v. capital expenditure programmes; STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Source: Annual Report of Godrej (FY 2022-23)
  • 19. DISCLOSURES i. segment-wise or product-wise position of business and its operations; ii. Change in the nature of the business of the company iii. Key business developments iv. Change in the Financial Year v. capital expenditure programmes; vi. details and status of acquisition, merger, expansion, modernization and diversification; STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Source: Annual Report of Godrej (FY 2022-23)
  • 20. DISCLOSURES i. segment-wise or product-wise position of business and its operations; ii. Change in the nature of the business of the company iii. Key business developments iv. Change in the Financial Year v. capital expenditure programmes; vi. details and status of acquisition, merger, expansion, modernization and diversification; vii. developments, acquisition and assignment of material Intellectual Property Rights; STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Source: Annual Report of Godrej (FY 2022-23)
  • 21. DISCLOSURES i. segment-wise or product-wise position of business and its operations; ii. Change in the nature of the business of the company iii. Key business developments iv. Change in the Financial Year v. capital expenditure programmes; vi. details and status of acquisition, merger, expansion, modernization and diversification; vii. developments, acquisition and assignment of material Intellectual Property Rights; viii. any other material event having an impact on the affairs of the company. STATE OF THE COMPANY’S AFFAIRS Section 134 (3) of the Companies Act, 2013 Source: Annual Report of Godrej (FY 2022-23)
  • 22. DISCLOSURES 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. It is mandatory disclose in its report even if there are no changes in the nature of business of the company. CHANGE IN THE NATURE OF BUSINESS Sub-Rule (5)(ii) of Rule 8 of Companies (Accounts) Rules, 2014 Example: “There is no change in the nature of the business of the company for the year under review, which s primarily _____________________” Source: Annual Report of Godrej (FY 2022-23)
  • 23. DISCLOSURES The company is required to disclose material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year and the date of the Report. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY, HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT Source: Annual Report of Godrej (FY 2022-23) Section 134 (3) of the Companies Act, 2013
  • 24. DISCLOSURES MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY, HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT Example: If there are material changes and commitments but their impact on the financial position is not determinable, a statement should be disclosed in the Report as under : “Following material changes and commitments have occurred between the end of the financial year to which the financial statements relate and the date of this Report and their impact on financial position of the company is not determinable. (i) ………………… (ii) ……………….. (iii) ……………….. The causes for such material changes and commitment as stated above and remedial measures taken by the company are given below: (i) ………………… (ii) ……………….. (iii) ………………..” Source: Annual Report of Godrej (FY 2022-23) Section 134 (3) of the Companies Act, 2013
  • 25. DISCLOSURES MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY, HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT Example: If there are no such material changes and commitments affecting the financial position of the company, a statement should be disclosed in the Report as under : “There have been no material changes and commitments, which affect the financial position of the company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.” Source: Annual Report of Godrej (FY 2022-23) Section 134 (3) of the Companies Act, 2013
  • 26. DISCLOSURES CAPITAL STRUCTURE • SHARE CAPITAL In case the company has not issued any shares or had not made any allotment during the year under review: “During the financial year under review, the company did not issue any shares. The paid up share capital of the company as on March 31, 202___ [Closing Period] is INR ______________ consisting ______________[number of shares] of INR ____ [face value] each. There is no change in the authorised, issued, subscribed and paid-up share capital of the company during the financial year 2022-23.” Source: Annual Report of Godrej (FY 2022-23) Section 134 (3) of the Companies Act, 2013
  • 27. DISCLOSURES CAPITAL STRUCTURE • SHARE CAPITAL In case the company has not issued any shares or had not made any allotment during the year under review: “During the financial year under review, the company did not issue any shares. The paid up share capital of the company as on March 31, 202___ [Closing Period] is INR ______________ consisting ______________[number of shares] of INR ____ [face value] each. There is no change in the authorised, issued, subscribed and paid-up share capital of the company during the financial year 2022-23.” • EMPLOYEE STOCK OPTION (ESOP) Example: “During the financial year 2022-23, the company did not issue any Employee Stock Options (ESOPs) as a part of any compensation and equity incentive programs.” Source: Annual Report of Godrej (FY 2022-23) Section 134 (3) of the Companies Act, 2013
  • 28. DISCLOSURES CAPITAL STRUCTURE • SWEAT EQUITY SHARES Example: “During the financial year 2022-23, the company did not issue any Sweat Equity Shares maintaining its capital structure unchanged from the previous year.” • EMPLOYEE STOCK OPTION (ESOP) Example: “During the financial year 2022-23, the company did not issue any Employee Stock Options (ESOPs) as a part of any compensation and equity incentive programs.” Source: Annual Report of Godrej (FY 2022-23) Section 134 (3) of the Companies Act, 2013
  • 29. DISCLOSURES CAPITAL STRUCTURE • SWEAT EQUITY SHARES Example: “During the financial year 2022-23, the company did not issue any Sweat Equity Shares maintaining its capital structure unchanged from the previous year.” • BONUS SHARES Example: “During the financial year 2022-23, the company did not issue any Bonus Shares maintaining its existing capital structure.” Source: Annual Report of Godrej (FY 2022-23) Section 134 (3) of the Companies Act, 2013
  • 30. DISCLOSURES MANAGEMENT – DIRECTORS AND KEY MANAGERIAL PERSONNEL Source: Annual Report of Godrej (FY 2022-23) Rule 8(5) of Companies (Accounts) Rules, 2014 The company in its Board’s report is required to reflect the change in composition of the Board of Directors and KMP (CEO, CFO and CS) during the year under review. As a measure of good corporate governance practice, the Secretarial Standard has extended the disclosure requirement to include the persons who have been appointed /ceased to be Directors and/or Key Managerial Personnel of the company after the end of the year and up to the date of the Report. In addition, the Standard also requires that the mode of such appointment/cessation should also be disclosed in the Report. Mode of appointment may be by the Board, by the shareholders or by way of Nomination as the case may be. Mode of cessation may be by way of resignation, vacation, death, retirement or removal as the case may be.
  • 31. DISCLOSURES INDEPENDENT DIRECTORS Source: Annual Report of Godrej (FY 2022-23) Sub-section (10) of section 149 of the Companies Act, 2013 The disclosure shall include the following: a) in case of appointment of Independent Directors, the justification for choosing the proposed appointees for appointment as Independent Directors; and b) in case of re-appointment after completion of the first term, the rationale for such re-appointment.
  • 32. DISCLOSURES Source: Annual Report of Godrej (FY 2022-23) Sub-section (6) of section 149 of the Companies Act, 2013 The Report shall include a statement: a) that necessary declaration under section 149(7) of the Companies Act, 2013 with respect to the criteria of independence laid down in section 149(6) of the Companies Act, 2013 has been received from all the Independent Directors of the company; b) that the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act. DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF CODE OF CONDUCT
  • 33. DISCLOSURES BOARD MEETINGS Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 of the Companies Act, 2013 The Report shall include the number of meetings of the Board held during the year.
  • 34. DISCLOSURES BOARD MEETINGS Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 of the Companies Act, 2013 The Report shall include the number of meetings of the Board held during the year. Example: “During the financial year 202__-2__, ___ [number of meetings] meetings of the Board of Directors were held on __________, 20__, _______, 202__, ________, 202__, and _________, 202__. The interval between two meetings do not exceed 120 days.”
  • 35. DISCLOSURES COMMITTEE Source: Annual Report of Godrej (FY 2022-23) Sub-section (8) of section 177 of the Companies Act, 2013 Sub-section (2) of section 135 of the Companies Act, 2013 The Report shall disclose: a) Composition of Committees constituted by the Board under the Act and the Listing Regulations as well as changes in their composition, if any, during the year; b) The number and dates of meetings of such committees held during the year. The Standard requires the disclosure of composition of all committees constituted by the Board under the Act and the Listing Regulations. Further, the changes in the composition of such committees during the year should also be disclosed in the Report.
  • 36. DISCLOSURES POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 read with proviso to sub-section (4) of section 178 of the Companies Act, 2013 The Report shall disclose company’s policy on directors’ appointment and remuneration and the criteria for determining qualifications, positive attributes and independence of a Director. Where the said policy is available on the website of the company, it would be sufficient to disclose salient features of such policy, any change therein and the web-link at which the complete policy is available.
  • 37. DISCLOSURES POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 read with proviso to sub-section (4) of section 178 of the Companies Act, 2013 The Report shall disclose company’s policy on directors’ appointment and remuneration and the criteria for determining qualifications, positive attributes and independence of a Director. Where the said policy is available on the website of the company, it would be sufficient to disclose salient features of such policy, any change therein and the web-link at which the complete policy is available. Example: “The policy on the Directors’ appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 have been revised/approved by the Board of Directors of the Company in its Board Meeting held on _____, 202__. The Nomination and Remuneration Policy is also available on the company’s website at _______________. The said policy ensures that: 1. __________ 2. __________”
  • 38. DISCLOSURES BOARD EVALUATION Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 the Companies Act, 2013 The Report of every listed company and other prescribed class of public companies shall include a statement indicating the manner in which formal annual evaluation of the performance of the Board, its Committees and of Individual Directors has been made. 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. The best practice to evaluate the performance of every individual directors that the evaluation shall be done by the entire Board of Directors, excluding the director being evaluated one by one.
  • 39. DISCLOSURES DIRECTORS’ RESPONSIBILITY STATEMENT Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 the Companies Act, 2013 The Report shall include a Directors’ Responsibility Statement stating the following: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the year and of the profit and loss of the company for that period; c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) the Directors had prepared the annual accounts on a going concern basis; e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;
  • 40. DISCLOSURES INTERNAL FINANCIAL CONTROLS Source: Annual Report of Godrej (FY 2022-23) Rule (8)(5) of the Companies (Accounts) Rules, 2014 The Report shall contain the details in respect of adequacy of internal financial controls with reference to the financial statements.
  • 41. DISCLOSURES INTERNAL FINANCIAL CONTROLS Source: Annual Report of Godrej (FY 2022-23) Rule (8)(5) of the Companies (Accounts) Rules, 2014 The Report shall contain the details in respect of adequacy of internal financial controls with reference to the financial statements. Example: “Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanism, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosure.”
  • 42. DISCLOSURES FRAUD’S REPORT Source: Annual Report of Godrej (FY 2022-23) Section 143(12) of the Companies Act, 2013 The details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government, shall be disclosed in the Report.
  • 43. DISCLOSURES FRAUD’S REPORT Source: Annual Report of Godrej (FY 2022-23) Section 143(12) of the Companies Act, 2013 The details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government, shall be disclosed in the Report. Example: In case no fraud reported “During the year under review, no auditor has reported to the Audit Committee or the Board of Directors, under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.”
  • 44. DISCLOSURES FRAUD’S REPORT Source: Annual Report of Godrej (FY 2022-23) Section 143(12) of the Companies Act, 2013 The details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government, shall be disclosed in the Report. In case of fraud reported to the Audit Committee and the Board, the following disclosure shall be made in the report for each fraud: • Nature of Fraud with description; • Approximate Amount involved; • Parties involved, if remedial action not taken; and • Remedial actions taken.
  • 45. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES Source: Annual Report of Godrej (FY 2022-23) Rule 8(1) of the Companies (Accounts) Rules, 2014 In case of companies having Subsidiaries, Associates and Joint Ventures, the Report shall include a separate section highlighting the performance of each of the Subsidiaries, Associates and Joint venture companies and their contribution to the overall performance of the company. Report on performance and financial position of the Subsidiaries, associates and Joint Ventures
  • 46. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES Source: Annual Report of Godrej (FY 2022-23) Rule 8(1) of the Companies (Accounts) Rules, 2014 In case of companies having Subsidiaries, Associates and Joint Ventures, the Report shall include a separate section highlighting the performance of each of the Subsidiaries, Associates and Joint venture companies and their contribution to the overall performance of the company. Example: “The Company is presently having __________[no. of subsidiaries with name]. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company, which forms part of our Financial Statements. Further, a statement containing the salient features of the financial statement of our wholly owned subsidiary companies in the prescribed form AOC-1 is enclosed as “Annexure A”.” Report on performance and financial position of the Subsidiaries, associates and Joint Ventures
  • 47. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES Source: Annual Report of Godrej (FY 2022-23) Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014 The Report shall contain the names of companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year. Companies which have become or ceased to be subsidiaries, associates and joint ventures
  • 48. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES Source: Annual Report of Godrej (FY 2022-23) Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014 The Report shall contain the names of companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year. Example: “During the financial year 2022-23, the company has incorporated __ wholly or partly-owned subsidiary/associate/joint venture companies on ________, 202__. The details are as follows: • Subsidiary/Associate/Joint Venture Company 1 – [Brief Main Objects of the Company] • Subsidiary/Associate/Joint Venture Company 2 – [Brief Main Objects of the Company] • Subsidiary/Associate/Joint Venture Company 3 – [Brief Main Objects of the Company]” Companies which have become or ceased to be subsidiaries, associates and joint ventures
  • 49. DISCLOSURES DEPOSITS Source: Annual Report of Godrej (FY 2022-23) Rule 8(5)(v) of Companies (Accounts) Rules, 2014 and Rule 2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014 The disclosure shall include the details of deposit accepted during the year. In case of Private Company, details of amount received from a person who at the time of the receipt of the amount was a Director of the company or relative of the Director of the company.
  • 50. DISCLOSURES DEPOSITS Source: Annual Report of Godrej (FY 2022-23) Rule 8(5)(v) of Companies (Accounts) Rules, 2014 and Rule 2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014 Example: “The Company has not accepted any deposits from the public in terms of applicable laws under Companies Act, 2013 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date. During the year under review, Company has received the amount of INR ______________ (repaid during the year) from Mr. _________, [Name of Director]. Furthermore, the company has received a declaration in writing to the effect from the directors that the amount is not being given out of funds acquired by her by borrowing or accepting loans or deposits from others which doesn’t consider as Deposits under the Companies Act, 2013.”
  • 51. DISCLOSURES PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 of the Companies Act, 2013 The particulars of loans, guarantees or investments under section 186 shall be disclosed in the Report. As a matter of good corporate governance practice, the Standard requires that along with the particulars of the loans given, investments made, guarantees given or securities provided during the year by the company, the purpose for which such loans/guarantees/securities are proposed to be utilized by the recipient should also be disclosed in the Report. A company shall disclose the aforesaid particulars in the notes to the financial statement and give reference thereof in the Report.
  • 52. DISCLOSURES PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 of the Companies Act, 2013 Example: “The particulars of loans, guarantees and investments, as required under Section 186 of the Act and Schedule V of the Listing Regulations, have been disclosed under Note no. _______ of the financial statements for FY 202__-2__.”
  • 53. DISCLOSURES PARTICULARS OF CONTRACTS, ARRANGEMENTS WITH RELATED PARTIES Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 of the Companies Act, 2013 Rule 8(2) of Companies (Accounts) Rules, 2014 Sub-section (2) of section 188 of the Companies Act, 2013 The disclosure shall include the following: a) contracts / arrangements / transactions with related parties which are not at arm’s length basis; b) material contracts / arrangements / transactions with related parties which are at arm’s length basis; c) contracts / arrangements with related parties which are not in the ordinary course of business and justification for entering into such contract.
  • 54. DISCLOSURES PARTICULARS OF CONTRACTS, ARRANGEMENTS WITH RELATED PARTIES Source: Annual Report of Godrej (FY 2022-23) Sub-section (3) of section 134 of the Companies Act, 2013 Rule 8(2) of Companies (Accounts) Rules, 2014 Sub-section (2) of section 188 of the Companies Act, 2013 The disclosure shall include the following: a) contracts / arrangements / transactions with related parties which are not at arm’s length basis; b) material contracts / arrangements / transactions with related parties which are at arm’s length basis; c) contracts / arrangements with related parties which are not in the ordinary course of business and justification for entering into such contract. Form AOC-2 to be enclosed as Annexure
  • 55. DISCLOSURES CORPORATE SOCIAL RESPONSIBILITY Source: Annual Report of Godrej (FY 2022-23) Rule 9 of the Companies (Accounts) Rules, 2014 The Report shall include an Annual Report on the CSR activities and shall comprise the following: a) a brief outline of the CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web link to the CSR Policy and projects or programs;
  • 56. DISCLOSURES CORPORATE SOCIAL RESPONSIBILITY Source: Annual Report of Godrej (FY 2022-23) Rule 9 of the Companies (Accounts) Rules, 2014 The Report shall include an Annual Report on the CSR activities and shall comprise the following: a) a brief outline of the CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web link to the CSR Policy and projects or programs; Example: “During the financial year, the Company has started several projects in view of its responsibility towards the masses. CSR activities are being implemented in project and program mode, in areas or subjects specified in Schedule VII of the Act, in the areas of education and health care, poverty, sanitation etc., in the periphery of project areas of the company (local area).”
  • 57. DISCLOSURES CORPORATE SOCIAL RESPONSIBILITY Source: Annual Report of Godrej (FY 2022-23) Rule 9 of the Companies (Accounts) Rules, 2014 The Report shall include an Annual Report on the CSR activities and shall comprise the following: a) a brief outline of the CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web link to the CSR Policy and projects or programs; Example: “Brief Outline of Company’s CSR Policy The company’s CSR policy establishes a transparent monitoring mechanism for the implementation of CSR activities, primarily through the establishment of the CSR Committee. These initiatives align with the core focus areas of the _______, encompassing Education, Healthcare, Eradicating Hunger, Animal Welfare, Environment Sustainability, Livelihood Enhancement, and Community Upliftment, among others.”
  • 58. DISCLOSURES CORPORATE SOCIAL RESPONSIBILITY Source: Annual Report of Godrej (FY 2022-23) Rule 9 of the Companies (Accounts) Rules, 2014 The Report shall include an Annual Report on the CSR activities and shall comprise the following: b) composition of the CSR Committee, number of meetings held during the year; Example: “Composition of the CSR Committee The composition of the CSR Committee as on March 31, 20__ is as under: CSR Committee Member Designation No. of Meetings to attend No. of Meetings attended Name 1 Chairman Name 2 Member
  • 59. DISCLOSURES CORPORATE SOCIAL RESPONSIBILITY Source: Annual Report of Godrej (FY 2022-23) Rule 9 of the Companies (Accounts) Rules, 2014 The Report shall include an Annual Report on the CSR activities and shall comprise the following: c) average net profits for the three immediately preceding years; d) prescribed CSR expenditure i.e. two percent of clause (c) above; e) details of amount spent on CSR during the year including total amount to be spent, amount unspent and manner in which the amount has been spent; f) in case the prescribed CSR amount has not been spent, reasons for not spending the same; g) a responsibility statement from the CSR Committee that the implementation and monitoring of the CSR Policy is in compliance with the CSR objectives and policy of the company.
  • 60. DISCLOSURES CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Rule 134(3) of the Companies Act, 2013 The Report shall include: CONSERVATION OF ENERGY i. the steps taken or impact on conservation of energy; ii. the steps taken by the company for utilising alternate sources of energy; iii. the capital investment on energy conservation equipmen A separate Annexure to be enclosed in the Report
  • 61. DISCLOSURES CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Rule 134(3) of the Companies Act, 2013 The Report shall include: TECHNOLOGY ABSORPTION i. Efforts made towards technology absorption; ii. Benefits derived like product improvement, cost reduction, product development or import substitution; iii. in case of imported technology (imported during the last three years reckoned from the beginning of the year under reference) – a) details of the technology imported; b) the year of import; c) whether the technology has been fully absorbed and if not, areas where absorption has not taken place, and the reasons thereof; iv. the expenditure incurred on Research and Development. A separate Annexure to be enclosed in the Report
  • 62. DISCLOSURES CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Rule 134(3) of the Companies Act, 2013 The Report shall include: FOREIGN EXCHANGE EARNINGS AND OUTGOINGS S. No. Particulars Amount 1 Foreign Exchange earned in terms of actual inflows during the year 2 Foreign Exchange outgo during the year in terms of actual outflows A separate Annexure to be enclosed in the Report
  • 63. DISCLOSURES RISK MANAGEMENT PROCESS Section 134(3) of the Companies Act, 2013 The Report shall include: A statement indicating development and implementation of a risk management policy for the company including identification therein elements of risk, if any, which in the opinion of the Board may threaten the existence of the company, shall be included in the Report. In addition, as a matter of good corporate governance practice, the Standard provides that the strategy to mitigate such risks should also be disclosed in the Report. A separate Annexure to be enclosed in the Report
  • 64. DISCLOSURES VIGIL MECHANISM Sub-section (9) of section 177 of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 The disclosure shall, inter alia, include the mechanism for: a) the Directors and employees to report their genuine concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct; b) providing adequate safeguards against victimisation; c) providing direct access to the higher levels of supervisors and/or to the Chairman of the Audit Committee, in appropriate or exceptional cases. No. of Complaints received in this regard shall also be reported. Web Link where policy is available shall also be reported.
  • 65. DISCLOSURES MATERIAL ORDERS OF JUDICIAL BODIES/REGULATORS Rule 8(5)(vii) of Companies (Accounts) Rules, 2014 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.
  • 66. DISCLOSURES MATERIAL ORDERS OF JUDICIAL BODIES/REGULATORS Rule 8(5)(vii) of Companies (Accounts) Rules, 2014 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. Example: “During the Financial Year 2022-23 and thereafter till the date of this Report, there were no significant and material orders passed by the regulators or Courts or Tribunals which can adversely impact the going concern status of your Company and its operations in future.”
  • 67. DISCLOSURES AUDITOR Section 134(3) of the Companies Act, 2013 Names of the • Statutory Auditor, • Cost Auditor and • Secretarial Auditor and details of any change in such Auditors, during the year and up to the date of the Report due to resignation / casual vacancy / removal / completion of term shall be disclosed in the Report.
  • 68. DISCLOSURES SECRETARIAL AUDIT REPORT Sub-section (1) of section 204 of the Companies Act, 2013 Form MR-3 (Secretarial Audit Report) shall be annexed with the report
  • 69. DISCLOSURES EXPLANATIONS IN RESPONSE TO AUDITORS’ QUALIFICATIONS Sub-section (3) of section 204 and Sub-section (3) of section 134 of the Companies Act, 2013 The Board should state detailed explanation for all the observations and qualifications given by the auditor in his audit report and in the notes attached to the financial statement sheet including the reasons for such material deviations and reasons that led to such deviations. If the auditors’ report involves a debatable point on which differences of opinion has arisen, the Board should give full explanation about the same in its report. The Board’s Report may also contain a confirmation of the follow-up action taken by the directors on the qualifications made in accounts for previous years.
  • 70. DISCLOSURES COMPLIANCE WITH SECRETARIAL STANDARDS Paragraph 9 of Secretarial Standard on Meetings of the Board of Directors (SS- 1) The Report shall include a statement on compliance of applicable Secretarial Standards and other Secretarial Standards voluntarily adopted by the company.
  • 71. DISCLOSURES CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC) The status of corporate insolvency resolution process, if any, initiated under the IBC also needs to be disclosed in the Report. Section 134(3) of the Companies Act, 2013
  • 72. DISCLOSURES ANNUAL RETURN A copy of the annual return shall be placed on the website of the company, if any, and the web-link of such annual return shall be disclosed in the Report. (Section 92(3)) Section 134(3) and section 92(3) of the Companies Act, 2013
  • 73. DISCLOSURES ANNUAL RETURN A copy of the annual return shall be placed on the website of the company, if any, and the web-link of such annual return shall be disclosed in the Report. (Section 92(3)) Section 134(3) and section 92(3) of the Companies Act, 2013 Form MGT-9 (Annual Return) shall be enclosed on the website of the Company.
  • 74. OTHER DISCLOSURES DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Rule 8(5) of the Companies (Accounts) Rules, 2014 Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 Disclosures pertaining to the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, in the Corporate Governance Report: i. number of complaints filed during the financial year; ii. number of complaints disposed of during the financial year; iii. number of complaints pending as at the end of the financial year.
  • 75. FILING DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Rule 8(5) of the Companies (Accounts) Rules, 2014 Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 Disclosures pertaining to the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, in the Corporate Governance Report: i. number of complaints filed during the financial year; ii. number of complaints disposed of during the financial year; iii. number of complaints pending as at the end of the financial year.
  • 76. FILING AND SUBMISSION OF THE REPORT The resolution passed by the Board approving such Report shall also be filed with the Registrar of Companies. • Form MGT-14 • Within 30 days of the Board Meeting
  • 77. FILING AND SUBMISSION OF THE REPORT The Report along with the audited financial statement (Standalone & Consolidated) of the company shall be filed with the Registrar of Companies. • Form AOC-4 • Within 30 days of the Annual General Meeting