Checklist for Annual Report of Listed Company

3rd December 2018

Dear Professionals,

As we all knows that preparation of Annual Report of a listed Company is a very complex and time consuming task. The Companies Act, 2013, SEBI (LODR), 2015 and many other rules and regulations mandates to include various points in the Annual Report of the Listed Company.

Therefore, through this article we are trying to remove the complexity of preparing Annual Report of Listed Company as much as possible and so that we are providing some basics points that needs to be considered while preparing the Annual Report of the listed company.

So, before starting with the points there are the steps that you need to follow to remove the complexity, you should follow some basics steps

  1. First prepare your Annual Report;
  2. check it through this checklist given below;
  3. strike off the points you already covered in your Annual Report;
  4. Highlight the uncover points
  5. And Finally include the remaining points in your Annual Report

Now, the points that are required to be covered in the Annual Report are as follows:

  • the web address, where annual return referred to in sub-section (3) of section 92 has been placed (Section not notified yet)
  • number of meetings of the Board;
  • Directors’ Responsibility Statement;
  • a statement on declaration given by independent directors under sub-section (6) of section 149
  • 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 form AOC-2;
  • 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
  • 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;
  • 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.
  • The Board’s Report shall be prepared based on the stand alone financial statements of the company and shall report on the highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the company during the period under report].
  • The financial summary or highlights;
  • the change in the nature of business, if any;
  • the details of directors or key managerial personnel appointed or resigned during the year;
  • the names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year;
  • the details relating to deposits
  • the details of deposits which are not in compliance with the requirements of Chapter V of the Act;
  • 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;
  • the details in respect of adequacy of internal financial controls with reference to the Financial Statements;
  • The Directors’ Responsibility Statement;
  • 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;
  • consolidated financial statements audited by its statutory auditors;
  • 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 there under;
  • Directors` Report;
  • Management discussion and analysis report;
  • For the top 500 Companies: Business Responsibility Report;
  • In case of appointment or re-appointment of director: brief resume, his expertise, relationship with directors, Name of the Company in which he hold directorship or membership of committee of Board ans shareholding of non- executive director;
  • Disclosure about the shares issued on preferential basis, if any;
  • Explanation for the deviation(s) or variation(s), if any, in the use of proceeds from the objects stated in the offer document or explanatory statement to the notice for the general meeting, as applicable in case of public issue, rights issue, preferential issue etc;
  • Disclosure of voting rights not exercised directly by employees in respect of shares to which any scheme relates(Names of employees, reasons for not voting directly, names of person who is exercising such voting rights, number and percentage of shares, resolution on which votes casted and manner of casting of votes etc;
  • Disclosure about Sweat Equity shares and ESOP Scheme;
  • Disclosure about re-appointment of Independent Directors;
  • Reason for voluntary revision of financial Statement or Board report, if applicable;
  • Composition of Audit Committee and if board has not accepted any recommendation of audit committee, reasons for same;
  • Details of establishment of Vigil Mechanism, if applicable;
  • Details of managing or whole-time director who is in receipt of any commission from the company and also receiving any remuneration or commission from any holding company or subsidiary company of such company, if applicable;
  • specify the ratio of the remuneration of each director to the median employee’s remuneration and such other details as provided in Rule 5(1);
  • a statement showing the names of top ten employees in terms of remuneration drawn;
  • Secretarial Audit Report in Form MR-3 shall be annexed with the Board’s Report;
  • Number of complaints received and disposed off during the year;
  • Cost Audit, if applicable;
  • The Top five hundred listed entities based on market capitalization shall formulate a Dividend distribution policy and shall disclosed the same in annual report and website;
  • Corporate Governance Report;
  • Declaration signed by the chief executive officer stating that the members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management;
  • Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall be annexed with the directors’ report;
  • Disclosures with respect to demat suspense account/ unclaimed suspense account;
  • Disclosure under Sexual Harassment of Women Act

Hope you would efficiently cross verify your annual report with this checklist and it would make easier to you to identify your mistakes and help to rectify the same.

Thank you very much everyone.