Project Map
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Corporate Governance - Steps by SEBI for implementation of Kumar Mangalam Committee and Recommendations
Annexure to their Circular Letter to the Stock Exchanges
Annexure 1
Information to be placed before board of directors
Annual operating plans and budgets and any updates. Capital budgets and any updates. Quarterly results for the company and its operating divisions or business segments. Minutes of meetings of audit committee and other committees of the board. The information on recruitment and remuneration of senior officers just below the board level, including appointment or removal of Chief Financial Officer and the Company Secretary. 6. Show cause, demand, prosecution notices and penalty notices which are materially important Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. Any material default in financial obligations to and by the company, or substantial non-payment for goods sold by the company. Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the company or taken an adverse view regarding another enterprise that can have negative implications on the company. Details of any joint venture or collaboration agreement. Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property. Significant labour problems and their proposed solutions. Any significant development in Human Resources/ Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc. Sale of material nature, of investments, subsidiaries, assets, which is not in normal course of business. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer etc.
Annexure 2
Suggested List Of Items To Be Included In The Report On Corporate Governance In The Annual Report Of Companies
A brief statement on company's philosophy on code of governance. Board of Directors:
Composition and category of directors for example promoter, executive, non-executive, independent non-executive, nominee director, which institution represented as Lender or as equity investor. Attendance of each director at the BoD meetings and the last
AGM. Number of other BoDs or Board Committees he/she is a member or Chairperson of. Number of BoD meetings held, dates on which held. Audit Committee.
Brief description of terms of reference Composition, name of members and Chairperson
Meetings and attendance during the year 4. Remuneration Committee.
Brief description of terms of reference Composition, name of members and Chairperson
Attendance during the year Remuneration policy Details of remuneration to all the directors, as per format in main report. 5. Shareholders Committee.
Name of non-executive director heading the committee Name and designation of compliance officer Number of shareholders complaints received so far Number not solved to the satisfaction of shareholders Number of pending share transfers 6. General Body meetings.
Location and time, where last three AGMs held. Whether special resolutions Were put through postal ballot last year, details of voting pattern. Person who conducted the postal ballot exercise Are proposed to be conducted through postal ballot Procedure for postal ballot 7. Disclosures.
Disclosures on materially significant related party transactions i.e. transactions of the company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of company at large. Details of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. 8. Means of communication.
Half-yearly report sent to each household of shareholders. Quarterly results Which newspapers normally published in. Any website, where displayed Whether it also displays official news releases; and The presentations made to institutional investors or to the analysts. Whether MD&A is a part of annual report or not. 9. General Shareholder information
AGM : Date, time and venue Financial Calendar Date of Book closure Dividend Payment Date Listing on Stock Exchanges Stock Code Market Price Data : High., Low during each month in last financial year Performance in comparison to broad-based indices such as BSE Sensex, CRISIL index etc. Registrar and Transfer Agents Share Transfer System Distribution of shareholding Dematerialization of shares and liquidity Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date andlikely impact on equity ? Plant Locations Address for correspondence
Annexure 3
Non-Mandatory Requirements
a) Chairman of the Board
A non-executive Chairman should be entitled to maintain a Chairman's office at the company's expense and also allowed reimbursement of expenses incurred in performance of his duties. b) Remuneration Committee
i. The board should set up a remuneration committee to determine on their behalf and on behalf of the shareholders with agreed terms of reference, the company's policy on specific remuneration packages for executive directors including pension rights and any compensation payment. ii. To avoid conflicts of interest, the remuneration committee, which would determine the remuneration packages of the executive directors should comprise of at least three directors, all of whom should be non-executive directors, the chairman of committee being an independent director. iii. All the members of the remuneration committee should be present at the meeting. iv. The Chairman of the remuneration committee should be present at the Annual General Meeting, to answer the shareholder queries. However, it would be up to the Chairman to decide who should answer the queries. c) Shareholder Rights 3. The half-yearly declaration of financial performance including summary of the significant events in last six-months, should be sent to each household of shareholders. 4.Omitted 5. d) Postal Ballot 6. Currently, although the formality of holding the general meeting is gone through, in actual practice only a small fraction of the shareholders of that company do or can really participate therein. This virtually makes the concept of corporate democracy illusory. It is imperative that this situation which has lasted too long needs an early correction. In this context, for shareholders who are unable to attend the meetings, there should be a requirement which will enable them to vote by postal ballot for key decisions. Some of the critical matters which should be decided by postal ballot are given below : 7.
a) Maters relating to alteration in the memorandum of association of the company like changes in name, objects, address of registered office etc; b) Sale of whole or substantially the whole of the undertaking; c) Sale of investments in the companies, where the shareholding or the voting rights of thecompany exceeds 25%; d) Making a further issue of shares through preferential allotment or private placement basis; e) Corporate restructuring; f) Entering a new business area not germane to the existing business of the company; g) Variation in rights attached to class of securities; h) Matters relating to change in management
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