Drafting : Annual Report of Listed Company

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

2. 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.

DRAFTING : ANNUAL REPORT OF LISTED COMPANY

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:

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 92 has 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 188 in 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 company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report;

> 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 company including 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 company on 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 188 in 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:

• Reports and Certificate Given By PCS.

Part D – Secretarial Report/Statement/Certificates

Part E – Financial Report/Statement

Part F – Annexures of Notice

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:

1. https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/acts.html?act=NTk2MQ==#Financial_Statement_Boards_Report_etc

2. https://taxguru.in/sebi/sebi-notifies-revised-listing-regulations-disclosure-requirements.html

3. https://www.sebi.gov.in/

4. https://www.bseindia.com/

5. https://www.nseindia.com/

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Disclaimer: The views and opinion expressed in this article are based upon my understanding and do not necessarily be authentic.