Corporate Disclosure .ppt

this is business

1. CorporateDisclosure

2. Rationale` for Disclosures
Aneffectivedisclosurebasedregulation
(DBR)impliesgreaterresponsibilitieson
thecompanydirectors,itsmanagement
andadvisers
AneffectiveDBR promotesinvestor
activism
Marketsbelievethatperceivedbenefits
outweighperceivedcosts

3. Disclosure based Regulation –
Components & types of disclosure
Disclosures Disclosures
by whom for whom
Public Listed Cos. Shareholders
Intermediaries Investors
Stock Exchanges MARKET Intermediaries
Mutual Funds Regulator
Analysts & advisors Government
Other stake -
holders

4. Disclosure Based Regulation
Components & types of disclosures
Initial Disclosures –Disclosures for raising capital
by companies, mutual funds in offer documents
- Public Offers
- Private Placement
Continuous disclosures –financial / non-financial
Frequency of disclosure
Dissemination process –electronic, physical,
centralised, dispersed
Accessibility of information

5. Disclosure Based Regulation
Initial Disclosures
Continuous disclosures
Corporate Governance
Financial disclosures
Risk based disclosures for
intermediaries
Disclosures for stock exchanges

6. Disclosures
Board of Directors: information that must be
supplied
Annual, quarter, half year operating plans, budgets and
updates
Quarterly results of company and its business segments
Minutes of the audit committee and other board committees
Recruitment and remuneration of senior officers
Materially important legal notices and claims, as well as any
accidents, hazards, pollution issues and labor problems
Any actual or expected default in financial obligations
Details of joint ventures and collaborations
Transactions involving payment towards goodwill, brand
equity and intellectual property
Any materially significant sale of business and investments
Foreign currency and other risks and risk management
Any regulatory non-compliance

7. Disclosures
Disclosurestoshareholdersinadditionto
balancesheet,P&Landcashflowstatement
Boardcomposition(executive,non-exec,independent)
Qualificationsandexperienceofdirectors
Numberofoutsidedirectorshipsheldbyeachdirector
(cappedatdirectornotbeingamemberofmorethan10
board-levelcommittees,andChairmanofnotmorethan5)
Attendancerecordofdirectors
Remunerationofdirectors
Relationship(familialorpecuniary)withotherdirectors
Warningagainstinsidertrading,withproceduresto
preventsuchacts
Detailsofgrievancesofshareholders,andhowquickly
thesewereaddressed
Date,timeandvenueofannualgeneralmeetingof
shareholders

8. Disclosures
Disclosures to shareholders in addition to
balance sheet, P&L and cash flow statement
Datesofbookclosureanddividendpayment
Detailsofshareholdingpattern
Name,addressandcontactdetailsofregistrars
and/orsharetransferagents
Detailsaboutthesharetransfersystem
Stockpricedataoverthereportingyear,andhow
thecompany’sstockmeasureduptotheindex
Financialeffectsofstockoptions
Financialeffectsofanysharebuyback
Financialeffectsofanywarrantsthataretobe
exercised
Chapterreportingcorporategovernancepractices

9. Disclosures
Disclosures to shareholders in addition to
balance sheet, P&L and cash flow statement
DetailedchapteronManagementDiscussionand
Analysisfocusingonmarkets,operations,
finances,accounts,risks,opportunitiesand
threats,internalcontrolsystems
Consolidatedfinancialstatement,incorporating
accountsofallsubsidiaries(over50%shares
heldbyreportingcompany)
Detailsofallsignificantrelatedparty
transactions
Detailedsegmentreporting(revenues,costs,
operatingprofitsandcapitalemployed)
Deferredtaxliabilitiesandassetsand
debit/creditintheP&Lforthereportingyear

10. Disclosures
(A)Basisofrelatedpartytransactions
I.Astatementinsummary formof
transactionswithrelatedpartiesinthe
ordinarycourseofbusinessshallbeplaced
periodicallybeforetheauditcommittee.
II.Detailsofmaterialindividualtransactions
withrelatedpartieswhicharenotinthe
normalcourseofbusinessshallbeplaced
beforetheauditcommittee.
III.Detailsofmaterialindividualtransactions
withrelatedpartiesorothers,whicharenot
onanarm’slengthbasisshouldbeplaced
beforetheauditcommittee,togetherwith
Management’sjustificationforthesame

11. Disclosures
(B)DisclosureofAccountingTreatment
Todiscloseinthefinancialstatements,if
anaccountingtreatmentotherthan
prescribedinAccountingStandardhas
beenfollowedalongwithexplanation.
(C)BoardDisclosures–Riskmanagement
Internalandexternalbusinessrisks
ProcedurestoinformBoardmembersabout
theriskassessmentandminimization.
Periodicallyreviewed

12. Disclosures
(D)Proceedsfrompublicissues,rightsissues,
preferentialissuesetc.
TodisclosetotheAuditCommittee,on
use/applicationoffundsasandwhenanyissue
ismade
(E)Additionaldisclosures:
IntheAnnualReportthecriteriaofmaking
paymentstoNEDstobedisclosedorareference
tobemadethatthesameisavailableonthe
company’swebsite
numberofsharesandconvertibleinstruments
heldbyNEDs.
NEDsshalldisclosetheirshareholding(bothown
orheldby/forotherpersonsonabeneficial
basis)inthecompanyinwhichtheyare
proposedtobeappointedasdirectors,priorto
theirappointment.

13. Disclosures
F)Management
AManagement DiscussionandAnalysis
reporttoformpartoftheAnnualReport.
G)Shareholders
Disclosurestoshareholdersincaseof
appointment/reappointmentofdirectors,
quarterlyresultsandpresentationsmade,
shareholders’grievancecommitteeand
sharetransfercommittee,shareholding
pattern-change

14. CEO/CFO certification
TheCEO,i.e.ManagingDirectorandtheCFOi.e.
whole-timeFinanceDirectororheadofthefinance
functiontocertifytotheBoardthat:
(a)Theyhavereviewedfinancialstatementsandthe
cashflowstatementfortheyearandthese
statements:
(i)donotcontainanymateriallyuntruestatementor
omitanymaterialfactorcontainstatementsthatmight
bemisleading;
(ii)togetherpresentatrueandfairviewofthecompany’s
affairsandareincompliancewithexistingaccounting
standards,applicablelawsandregulations.
(b)notransactionsenteredintobythecompany
duringtheyearwhicharefraudulent,illegalor
violativeofthecompany’scodeofconduct.

15. CEO/CFO certification (contd)
(c)Theyacceptresponsibilityforestablishingand
maintaininginternalcontrolsandthattheyhave
evaluatedtheeffectivenessoftheinternalcontrol
systemsofthecompanyandtheyhavedisclosedto
theauditorsandtheAuditCommittee,deficienciesin
thedesignoroperationofinternalcontrols,ifany,of
whichtheyareawareandthestepstheyhavetaken
orproposetotaketorectifythesedeficiencies.
(d)TheyhaveindicatedtotheauditorsandtheAudit
committee
(i)Significantchangesininternalcontrolduringtheyear;
(ii)Significantchangesinaccountingpoliciesduringthe
yearandthatthesamehavebeendisclosedinthenotes
tothefinancialstatements;and
(iii)Instancesofsignificantfraudofwhichtheyhave
becomeawareandtheinvolvementtherein,ifany,ofthe
managementoranemployeehavingasignificantrolein
thecompany’sinternalcontrolsystem