DIRECTOR’S REPORT

MANAGEMENT
DISCUSSION AND ANALYSIS REPORT (MDA)

REPORT ON CORPORATE GOVERNANCE

Ashish Jain(11) Mehul Jain(12) Pankaj Jain(13)

Anthony A Joseph(14) Satish Kachhawa(15)
 DIRECTOR’S REPORT

An annual communication to the

shareholders about:
► the financial results
► business operations
► future outlook of the company
 SCOPE OF DISCUSSION

► Financial Performance
► Business Review for the year
► Retirement and Appointments of
Directors and Auditors
► Performance of Subsidiary Companies
► Status of Litigations
► Details of Key Employees
► Auditors’ Report
► Director’s Responsibility Statement
 SCOPE OF DISCUSSION contd…

► Management Discussion & Analysis

(MDA)
► Corporate Governance
► Foreign Exchange Earning & Outgo
► Risk Assessment
► Conservation of Energy
► Research & Development
► Technology Absorption & Innovation
► Future Plans
MANAGEMENT DISCUSSION AND
ANALYSIS
It is an important vehicle for:
► communicating Directors’ insights
about the reporting entity
► increasing the understandability and
usefulness of financial statements
► providing accessible information about
the entity and its operations
 SCOPE OF DISCUSSION
► Industry Structure and Developments
► Opportunities and Threats
► Segment wise or Product wise
Performance
► Outlook
► Risk and Concerns
► Internal Control Systems
► Discussion of Financial Performance
wrt Operational Performance
 SCOPE OF DISCUSSION contd…
► MaterialDevelopments in Human
Resource/ Industrial Relations
► Transactions with Senior Management
 CORPORATE
GOVERNANCE

Monitors the
Functions of an organization to ensure
maximization of shareholders’ wealth
through ethical conduct of business.
 OBJECTIVES OF CORPORATE
GOVERNANCE

It aims to provide positive effects on

all stakeholders such as customers,
employees, suppliers, regulatory
bodies and community at large.
 ORGANIZATION CHART: BOARD OF
DIRECTORS

Chairman

Executive Directors Non-Executive Directors

CEO Nominee Directors Other Directors

CTO CIO CFO

 How does CG affect Your
Investment?
► Improve the relationship between the
company and its shareholders &
stakeholders.
► Improve the quality of non-executive
directors.
► Improve the quality, quantity and
frequency of financial and managerial
disclosures.
PROCESS OF EFFECTIVE CG Contd..

► Improve the quality of information

that management shares with their
boards (monitoring mechanism)
► Improve compliance with applicable
legal and regulatory requirements
► Consideration and care for the
interest of the employees and local
community.
 A FEW FACTS
► Investors that sold U.S. companies with the weakest
shareholder rights and bought those with the
strongest shareholder rights earned an additional
return as high as 8.5%. (Corporate Governance and
Equity Prices, A Paper by Harvard and Wharton
Professors)

► 75% of the 200 institutional investors surveyed

regard board practices as important as financial
metrics for assessing companies. The study showed
that companies that moved from the worst to the
best governance practices could expect a 10%
increase in market valuation. (McKinsey)
 GLOBAL INITIATIVES
• SIR ADRIAN CADBURY COMMITTEE
To address the issues related to corporate governance in
united kingdom

• CORPORATE GOVERNANCE REPORT OF SINGAPORE

GOVERNMENT

• SARBANES-OXLEY ACT, 2002 BY THE AMERICAN

CONGRESS Which came into effect in July 2002 – to
address all the issues associated with corporate failures to
achieve quality governance and to restore investors’
confidence
 CORPORATE GOVERNANCE IN INDIA

• SEBI constituted a committee headed by Shri N. R. NARAYANA

MURTHY to review existing code of Corporate Governance
• RECOMMENDATIONS:
• Strengthening The Responsibilities Of Audit Committee
• Improving Quality Of Financial Disclosures
• Utilization Of Proceeds From IPO
• To Assess & Disclose Business Risks
• Formal Code Of Conduct For Board
• Whistle Blower Policy To Be In Place In A Company Providing Freedom
To Approach The Audit Committee
• Subsidiaries To Be Reviewed By Audit Committee Of Holding Company
 THEN (Mid 1997)
Country Independent Audit Committees
Directors
China
Hong Kong Yes
India
Indonesia
Japan
Korea
Malaysia Yes
Philippines
Taiwan
Singapore Yes Yes
 NOW (2007)
Country Independent Audit Committees
Directors
China Yes Yes
Hong Kong Yes Yes
India Yes Yes
Indonesia Yes Yes
Japan Optional Optional
Korea Yes Yes
Malaysia Yes Yes
Philippines Yes Yes
Taiwan Yes Yes
Singapore Yes Yes
 ADVANTAGES
► Better Goodwill

► Market Credibility

► Vision for the future

► Attract Talent

► Induce more productivity from employees,

directly affecting bottom line
 CONCLUSION

► Maintain high level of ethics

► Optimize the value of all stakeholders
► Effective management and control of
business