Drafting Annual Report of Listed Company By CS Sujeet Kumar



As per

  1. SEBI (LODR) REGULATIONS, 2015

  2. COMPANIES ACT 2013

Applicable Section/Regulation

Regulation 34 of (Listing Obligations and Disclosure Requirements), 2015.

Provision

The listed entity shall

  1. Submit Annual Report to the stock exchange and
  1. Publish of Annual Report on its website.

Due Date

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.

PREPARATION OF ANNUAL REPORT ON THE BASIS OF THEORETICAL APPROACH.

As per Regulation 34 (2) of (Listing Obligations and Disclosure Requirements), 2015, the annual report shall contain the following:

  1. 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;]

  2. Consolidated financial statements audited by its statutory auditors;

  3. 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;

  4. Directors report;

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

  6. For the top [one thousand] listed entities based on market capitalization (calculated as on March 31 of every financial year), business responsibility report describing the initiatives taken by them from an environmental, social and governance perspective, in the format as specified by the Board from time to time:

Provided that listed entities other than top [one thousand] listed companies based on market capitalization and listed entities which have listed their specified securities on SME Exchange, may include these business responsibility reports on a voluntary basis in the format as specified.

As per Regulation 34 (3) of (Listing Obligations and Disclosure Requirements), 2015

(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.

PREPARATION OF ANNUAL REPORT ON THE BASIS OF PRACTICAL APPROACH.

For better understanding we divide contents of Annual Report into 6 Parts as mentioned below:

S. No.

Part

Contents/Particulars

1

A

Corporate Information

2

B

Notice of AGM and Directors Report

3

C

Annexures of Directors Report

4

D

Secretarial Report/Statement/Certificates

5

E

Financial Report/Statement

6

F

Annexures of Notice


Part A - Corporate Information

Part A (Corporate Information) includes Corporate Information i.e.

  • Details of Board of Directors.

  • Details of KMP.

  • Details of Committees.

  • Registered office Address, CIN, Contact Details.

  • RTA Details.

  • Stock Exchange Details.

  • Statutory Auditors Details.

  • Secretarial Auditor details.

  • Internal Auditor Details.

  • Bankers Details.

Part B - Notice of AGM and Directors Report

Part B (Notice of AGM and Directors Report) includes Corporate Information i.e.

  • Notice of AGM.

  • Notes on Notice.

  • Explanatory statement.

  • Voting Procedure.

  • Directors Report :

Contents of Director Report as per Section 134

  • the web address, if any, where annual return referred to in sub-section (3) of section 92has been placed]

  • number of meetings of the Board;

  • Directors’ Responsibility Statement;

  • a statement on declaration given by independent directors under sub-section (6) of section 149;

  • in case of a company covered under sub-section (1) of section 178, company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178];

  • explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made—

  • by the auditor in his report; and

  • by the company secretary in practice in his secretarial audit report;

  • particulars of loans, guarantees or investments under section 186;

  • particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188in the prescribed form;

  • the state of the company’s affairs;

  • the amounts, if any, which it proposes to carry to any reserves;

  • the amount, if any, which it recommends should be paid by way of dividend;

  • material changes and commitments, if any, affecting the financial position of the companywhich have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report;

  • the conservation of energy, technology absorption, foreign exchange earnings and outgo, in such manner as may be prescribed;

  • a statement indicating development and implementation of a risk management policy for the companyincluding identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company;

  • the details about the policy developed and implemented by the companyon corporate social responsibility initiatives taken during the year;

  • 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 8[annual evaluation of the performance of the Board, its Committees and of individual directors has been made;]

  • The Report of the Board shall contain the particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188in the Form AOC-2.

  • Report on Conservation of energy and Technology absorption and Foreign exchange earnings and Outgo.

  • Every listed company and every other public company having a paid up share capital of twenty five crore rupees or more calculated at the end of the preceding financial year shall include, in the report by its Board of directors, 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.

  • In addition to the information and details specified in sub-rule (4), the report of the Board shall also contain -

(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;

(iii) 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,-

 (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 alongwith 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.]

Part C - Annexures of Directors Report

Annexures of Directors are as follows:

S.No.

Particulars

Reference

1

Details of Directors seeking appointment and / or re-appointment

As per Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015

2

Annual Compliance with the Code of Conduct

Pursuant to the Schedule V (Part D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

3*

Certificate of Non-Disqualification Of Directors

As per Para Clause (10)(i) of Schedule V of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 read with regulation 34(3). *Certificate given by PCA/PCS.

4.

Management discussion and analysis report

As per Regulation 34 (2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations.

5.

Performance Evaluation Criteria of Independent Directors

 as per the PART D of Schedule II of SEBI (LODR) Regulations, 2015 and as prescribed under the Section 149 (6) of the Companies Act, 2013 and Regulation 16 of SEBI (LODR).

S.No.

Particulars

Reference

6.

Related Party Transaction Details

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014.

7.

Particulars of KMP/ Employees Remuneration

Details pertaining to remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

8.

Report on Corporate Governance

Regulation 17 to Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations, 2015)

9.*

Secretarial Audit Report

Form No. MR-3

Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel Rules, 2014 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

* given by PCA/PCS.

10.*

Secretarial Compliance Report

As per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

* given by PCA/PCS.

11.

Certification by Executive Director (ED) / CFO of the Company

As required by the Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

12.*

Certificate on Corporate Governance.

As per  Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI(LODR)], as required in Regulation 15(2) of SEBI (LODR)

*Certificate given by PCA/PCS.

12.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014

13.

Business Responsibility Report

As per Regulation 34 (2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations.


  • Reports and Certificate Given By PCS.

Part D - Secretarial Report/Statement/Certificates

Report/Statement/Certificates are as follows:

S.No.

Particulars

Reference

1

Certificate of Non-Disqualification Of Directors

As per Para Clause (10)(i) of Schedule V of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 read with regulation 34(3). *Certificate given by PCA/PCS.

2

Secretarial Audit Report

Form No. MR-3

Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel Rules, 2014 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

* given by PCA/PCS.

S.No.

Particulars

Reference

3

Secretarial Compliance Report

As per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

* given by PCA/PCS.

4

Certificate on Corporate Governance.

As per  Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI(LODR)], as required in Regulation 15(2) of SEBI (LODR)

*Certificate given by PCA/PCS.


Part E - Financial Report/Statement

Audited Financial Report/Statement includes:

S. No.

Particulars

1

Standalone/Consolidated 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;

2

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;


Part F - Annexures of Notice

S.No.

Particulars

Reference

1

FORM MGT-11

 

Proxy Form

(Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014

2

Form No. SH-13

 

Nomination Form

[Pursuant to section 72 of the Companies Act, 2013 and rule 19(1) of the Companies (Share Capital and Debentures) Rules 2014.

3.

Form No. SH-14

 

Cancellation or Variation of Nomination

Pursuant to sub-section (3) of section 72 of the Companies Act, 2013 and rule 19(9) of the Companies (Share Capital and Debentures) Rules 2014


Recent Amendments related to Annual Report:

1. Companies (Management and Administration) Amendment Rules 2021, dated 05th March, 2021 (‘Amendment notification 2021’).

Companies are no longer required to annex extract of annual return (MGT-9) with its Board’s report  Companies having a website shall place their annual return on the website and Weblink of the same should be disclosed in the Board’s report.

2. In view of the COVID-19 pandemic, the Ministry of Corporate Affairs (‘MCA’) issued General Circular Nos.14/2020, 17/2020 and 20/2020 dated April 08, 2020, April 13, 2020 and May 05, 2020, respectively and by General Circular No. 02/2021 dated January 13, 2021 (collectively referred to as “MCA Circulars”) allowed companies whose AGMs were due to be held in the year 2020 or becoming due in the year 2021, to conduct their AGMs on or before December 31, 2021 through VC/OAVM, without the physical presence of the Members at a common venue. The Securities and Exchange Board of India (‘SEBI’) also issued Circular No. SEBI/ HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020 the validity of which has been extended till December 31, 2021 by SEBI, vide its Circular No. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated January 15, 2021 (“SEBI Circulars”).

3. Pursuant to Ministry of Corporate Affairs (MCA) Circular read with SEBI Circular, Notice of the AGM along with the ANNUAL REPORT 2020-21 is being sent only through electronic mode to those members whose email addresses are registered with the Company/ Depositories.

4. In General meeting through video conferencing (VC) or other audiovisual means (OAVM) Ordinary business shall be considered and special business which is considered to be unavoidable by the Board may be transacted and to be included in Annual report.

Source:

Lex comply

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