Corporate Governance

ByDr P V S Jagan Mohan Rao

M Com, LL B, FCS, FICWA, Ph DChief Finance Officer & Company Secretary

Ind-Barath Power Infra Ltd&

Past President The Institute of Company Secretaries of India-New Delhi

and Central Council Member - The

Institute of Cost Accountants of India-Kolkata

KEY CONSTITUTUENTS

Shareholders

Management

Board of Directors

WHAT IS CORPORATE GOVERNANCE?

Stakeholders

CADBURY COMMITTEE ICSI CII SEBI - KUMARAMANGALAM BIRLA

COPANIES ACT 1956

SECURITIES EXCHANGE BOAR OF INDIA ACT, 1992

SEBI (ISSUE OF CAPITAL AND DISCLOSURE) REGULATIONS 2009

“Corporate governance deals with laws, procedures, practices and implicit rules that determine a company’s ability to take informed managerial decisions vis-à-vis its claimants- in particular, its shareholders, creditors, customers, the state and employees.”

-CII Desirable Corporate Governance – A Code, 1998

INCREASING LIABILITY OF DIRECTORS

Board of directors

COMPOSITION WHOLETIME INDEPENDENT NOMINEE NUMBER OF DIRECTORS NUMBER OF DIRECTORSHIPS ONE CAN

HAVE

• FIFTY PERCENT OF THE BOARD TO COMPRISE OF NON-EXECUTIVE DIRECTORS (MANDATORY)

• IN CASE OF A NON-EXECUTIVE CHAIRMAN, AT LEAST ONE-THIRD OF THE BOARD SHOULD COMPRISE OF INDEPENDENT DIRECTOR (MANDATORY)

• IN CASE OF EXECUTIVE CHAIRMAN, ATLEAST HALF OF BOARD SHOULD BE INDEPENDENT (MANDATORY)

• A qualified and independent audit committee should be set up by the board (mandatory)

• Audit committee to have minimum three non-executive directors, majority being independent (mandatory)

• Chairman of Audit Committee to be an independent director(mandatory)

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

When, one day, you have made your mark on the world, remember that, in the ultimate analysis, we are all mere temporary custodians of the wealth we generate, whether it be financial, intellectual, or emotional. The best use of all your wealth is to share it with those less fortunate.

I believe that we have all at some time eaten the fruit from trees that we did not plant. In the fullness of time, when it is our turn to give, it behooves us in turn to plant gardens that we may never eat the fruit of, which will largely benefit generations to come. I believe this is our sacred responsibility, one that I hope you will shoulder in time.

Thank you for your patience. Go forth and embrace your future with open arms, and pursue enthusiastically your own life journey of discovery!

Waren Buffet

Trusteeship obligations inherent in company operations, where assets and resources are pooled and entrusted to the managers for optimal utilization in the stakeholders’ interests.

- Mahatma Gandhi, Father of the Nation

Thank You