QUESTIONNAIRE. 4. The company also submits a summary statement of all its transactions with related parties, periodically to its audit committee

Transcription

1 QUESTIONNAIRE I. Management Structure: 1. Total Number of Directors of the company: 2. Is the chairman a non-executive director appointed according to the norms of clause 49 of SEBI: 3. Number of independent directors who are a) Promoters b) Previously executives of other companies c) Member of Audit committee d) Member of legal/consulting firms if any e) Material supplier/ service providers / customers / lessors / lessee of the company f) Major shareholder (More than 2% Stake) g) Purely outsiders Total Number of independent directors 4. The CEO/MD is appointed according to companies Act 1956: 5. The Chief Financial officer is a whole time employee: 6. The Maximum tenure of any independent director of the company is a) Less than 2 Years b) 2--4 Years c) More than 4 years II. Discourse Practices: 1. The financial results of the company are declared for every: Quarterly / Half yearly / Yearly. 2. Does the company inform its audit committee as and when funds are raised: Regularly / Occasionally / Never. 3. Does the company get all the funds raised, audited by its audit committee: 4. The company also submits a summary statement of all its transactions with related parties, periodically to its audit committee 260

2 5. Do the CEO / MD / CFO thoroughly scrutinize, whether the financial statements of the company are in accordance with its code of conduct? 6. Are there any significant changes in the accounting policies of the company? 7. If Yes, Are those changes disclosed in the companies' financial statements 8. Does the company inform its household shareholders about its financial performance twice in a year? 9. The payments made to independent directors and other non-executive directors are put in the web site of the company and published in the annual report. Remuneration 1. The Remuneration / pay package of the executive director is decided by a Remuneration committee set up for the purpose. 2. The composition of the remuneration committee of the company is the chairman and a) 3 non-executive Directors b) 2 non-executive Directors c)1 non-executive Directors d) No such Directors Miscellaneous 1. Is there any frauds taken place in the company during the previous accounting period? 2. If yes, fraud is caused by a) Management b) Employees c) others 3. The company has the mechanism of peer group evaluation for recommending the extension / withdrawal of the terms of appointing Non-executive Directors. 4. Does the company follow Whistle Blower Policy (Whistle Blower Policy: "employees reporting to management about the un ethical behavior by other employees such as frauds, violation of the company rules, etc...) 261

3 Management Questions Chief Executive Officer (CEO) strategy of the company and who sets it relationship with the board of directors relationship with majority and minority shareholders previous positions held in/outside the company functioning, structure and reporting lines of management team relationship with the internal auditor, external auditor, and chief compliance officer plans for improving corporate governance and progress to date related party transactions: current transactions, approval procedures, and is a report on related party transactions made available to all shareholders. CEO and senior management selection process succession planning: (written policy and potential candidates) Chief Financial Officer (CFO) preparation and information flow of financial reports disclosure of financial information to shareholders / creditors / market regulatory compliance relationship with the board of directors relationship with the internal auditor, external auditor, and chief compliance officer related party transactions: current transactions, approval procedures, and is a report on related party transactions made available to all shareholders major differences between company's accounting standards and IFRS any other responsibilities carried out by the person serving in this post relationship with securities analysts and other market information gath disseminators 262

4 history of disclosure; especially in connection with significant security offerings Chief of Internal Audit (I A) description / history of internal audit function (role and structure) IA members' involvement in other operational activities of the company history of the current practice with outsourcing of IA functions setting of annual work program (company and subsidiaries, if any) who appoints IA chief and members of IA team reporting to whom (board, audit committee, CEO, CFO) and how often relationship with the external auditor and how often main recent IA issues and how are they addressed any other responsibilities carried out by the person serving in this post Head of Risk Management organization, staff, and history of unit five or six most significant risks facing the company and the strategies set for managing them risk management function and reporting lines (what items and how often) annual report on risk management presented to board and approved by its members interaction with the board, audit committee, and chief of internal audit related party transactions: current transactions, approval procedures, and is a report on related party transactions made available to all shareholders any other responsibilities carried out by the person serving in this post 263

5 Chief Compliance Officer Organization, staff, and history of unit Scope of regulatory compliance; counterparts (e.g. regulators) Relationship (including, but not limited to reporting) with regulators Reporting relationship with board, CEO, and management (what items and how often) Annual report presented to board and approved by its members Interaction with the board, audit committee, and chief of internal audit Participation to board/board committees meetings Training on compliance given in the company, and how often Compliance procedures in terms of related party transactions Whistle blowing procedure Any other responsibilities carried out by the person serving in this post Head of Investor / Shareholder Relations Disclosure of financial and other material information Public presentation of the governance of the company Type and frequency of requests for information How are requests form shareholders responded to? Website communication ofthe company's info Plans for further development Any other responsibilities carried out by the person serving in this post External Auditors, Lawyers and Advisors Questions Independent External Auditors History of auditing the company; how they were selected Annual calendar of audit activity Major differences between company's accounting standards and IFRS Relations with the board, CEO, CFO, and chief of internal audit Reporting relationship (in form and in practice) 264

6 Opinion on the quality of internal controls, financial statements, practices of engaging in related party transactions, significant offbalance sheet transactions Deficiency areas that are repeatedly reported Audit partner rotation (how long) Actions taken by the company in response to the Management Letters Non-audit services provided to company and/or its affiliates What share of audit firm's revenues is represented by work performed for the Company and its affiliates External Lawyers Scope of advice; how they were selected History / lessons of disputes with shareholders / creditors / partners Main regulatory issues company has faced over the last 3 years; anticipated issues What share of the law firm's revenues is represented by work performed for the company and its affiliates External Corporate Governance Advisors Scope of advice; how they were selected Main governance areas to be improved Actions taken and plans for future Shareholder Questions Major Shareholder (or Representative) Strategy of the Company- short/long term Role of the board and the management Relationship and communication with the board and the management selection process of directors Importance of independent directors and definition of independency 265

7 Related party transactions: current transactions, approval procedures, and is a report on related party transactions made available to all shareholders? Relationship and attitude of controlling shareholders toward minorities Company s plans for improving corporate governance: benefits / drawbacks / costs Dividends and other benefits received Strategy / goals as a shareholder; how s/he plan to realize value on their investment Minority Shareholder relationship and communication with the board and the management mechanisms allowing minority shareholders to nominate directors to the board role and relationship with nominee directors meetings of shareholders: agenda reception and possibility of adding items access to information: strategy, finance, and related party transactions reports relationship and attitude of controlling shareholders toward minorities rights as minority shareholders; frequency of exercise of these rights possibility of exiting the company dividends and other benefits received strategy/goals as a shareholder; how s/he plans to realize value on their investment Director Questions Board Member strategy of the company five or six most significant risks faced by the company history of the board board and committees charters 266

8 process for selecting and nominating board members availability of initial orientation and trainings for directors (topics, frequency) budget and authority to hire consultants / specialists (examples) remuneration structure of board members and how is it set; who has input / influence? meeting procedures: frequency, agenda preparation, meeting notification, minutes and other board information materials areas discussed and type of decisions made by board role in development of strategy and review its implementation role in management supervision satisfaction with current audit of the company (internal and external) relationship with the CEO succession planning: (written policy and potential candidates) relationship with shareholders current independent directors' role and definition of independence related party transactions: current transactions, approval procedures, and is a report on related party transactions made available to all shareholders board evaluation process other activities and number of other boards the director is a member of challenges and areas where board effectiveness can be improved other competencies/skills that can be added to the board current board size: ideal for having good discussions and decision process company plans for developing the board function and progress to date Independent Director (Additional Question) do independent directors meet without executive board members are such meetings regularly scheduled or conducted ad-hoc Corporate Secretary (Board Secretary) history of the post functions of the corporate secretary 267

9 any other responsibilities carried out by the person serving as corporate secretary preparation process of the AGM preparation process of the board meetings agenda preparation information package preparation record keeping and disclosure of minutes Committee Member Questions Chair/Member of the Audit Committee role and functions of the committee (financial statements, internal controls and external audit procedures) history of development of the committee selection, skills, and training of members interaction with the chief of internal audit interaction with the external auditor follow up on Management Letters related party transactions: current transactions, approval procedures, is a report on related party transactions made available to all shareholders, and if the audit committee is in charge of reviewing such transactions major differences between company's accounting standards and IFRS Chair/Member of the Corporate Governance Committee role and functions of the committee history of development of the committee selection, skills, and training of members corporate governance policies and procedures, implementation, and plans ethics policies and procedures, implementation, and plans Chair of the Risk Management Committee role and functions of the committee history of development of the committee selection, skills, and training of members 268

10 setting of company's risk appetite procedures for overseeing risk management and reporting to the whole board interaction with the head of risk management 269