CORPORATE GOVERNANCE

Introduction
The concept of Corporate governance was brought by

Corporate Governance, is a set of standards, which aims to improve the Companys image, efficiency, effectiveness and social responsibilities. According to KUMAR MANGALAM BIRLA COMMITTEE The fundamental objective of Corporate Governance is the enhancement of the shareholders value, keeping in view the interest of other stakeholders.

 Financial reporting and disclosure which are also related to the accounting policies of a company and the existing accounting standards and auditing practices, are corner stones of corporate governance. A separate Committee appointed by the SEBI under the Chairmanship of Shri Y. H. Malegam (who is also a member of this Committee) has been examining these issues in association with the Institute of Chartered Accountants of India.

CORPORATE GOVERNANCE RELATED TO ACCOUNTING STANDARDS AND FINANCIAL REPORTING

 Over time the financial reporting and accounting standards in India have been upgraded. This however is an ongoing process and we have to move speedily towards the adoption of international standards. This is particularly important from the angle of corporate governance. The Committee took note of the discussions of the SEBI Committee on Accounting Standards referred to earlier and makes the following recommendations

1.

CONSOLIDATION OF ACCOUNTS OF SUBSIDIARIES.

The companies should be required to give consolidated accounts in respect of all its subsidiaries in which they hold 51 % or more of the share capital. The committee requested the Institute of Chartered Accountants of India to issue the Accounting Standards for consolidation expeditiously (Quickly).

2. SEGMENT REPORTING WHERE A COMPANY HAS MULTIPLE LINES OF BUSINESS

Equally in cases of companies with several businesses, it is important that financial reporting in respect of each product segment should be available to shareholders and the market to obtain a complete financial picture of the company.

3.

TREATMENT OF DEFERRED TAXATION

The treatment of deferred taxation and its appropriate disclosure has an important bearing on the true and fair view of the financial status of the company So committee suggested to Institute of Chartered Accountants of India to issue a standard on deferred tax liability at an early date.

4.

DISCLOSURE AND TREATMENT OF RELATED PARTY TRANSACTIONS

This is an important disclosure. i.e. It includes 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.

COMMITTEE ALSO SUGGEST LIST OF ITEMS TO BE INCLUDED IN THE REPORT ON CORPORATE GOVERNANCE IN THE ANNUAL REPORT OF COMPANIES (That Are Covered Under Annexure 4)

List of Suggestions
1. A brief statement on companys philosophy on code of governance. 2. Board of Directors: Composition and category of directors for example promoter, executive, non-executive, independent nonexecutive, 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 BOD meetings held, dates on which held.

3. 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.

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 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 and likely impact on equity Plant Locations Address for correspondence