BUSINESS POLICY AND STRATEGIC MANAGEMENT

Assignment: Company Annual Report

By N. Anand Reddy 1225111235 Section-B GIM

Corporate P&L A/c  Prepared for a given period  Comparative position  Grouping of income and expenditure  Details in schedules and notes to the accounts  Appropriation of profit and transfer of balance to the balance sheet  Signed by preparers and auditors P&L A/c of Nestle India Ltd.  Note 24 of Schedule R, Notes to the accounts states the sales accounting policy of the company as under Sale of goods is recognised at the point of despatch to the customer. Sales include excise duty but excludes sales tax.  It means that Nestle transfers all the risks and rewards of ownership to the customers at the time of despatch of goods  Note 24 of Schedule R, Notes to the accounts states the depreciation accounting policy of the company as under Depreciation is provided as per the straight line method at rates given in Schedule XIV to the Companies Act 1956 except for information technology equipments and vehicles which are depreciated over three to five years respectively and leasehold improvements are depreciated over the lease period. Cash Flow Statement  Prepared for a given period  Comparative position  Cash flows from Operating, Financing and Investing activities  Reconciliation with the opening and closing balances of cash and cash equivalents  Signed by preparers and auditors  A derived statement

Auditor s Report  Requirements of The Companies Act - Section 227 of the Companies Act deals with the auditor s report  MAOCARO (Manufacturing and Other Companies (Auditor s Report) Order 1988  Reasons for qualified answers - Where, in the auditor s report, the answers to any of the questions is unfavourable or qualified, the report shall also state the reasons for the same. Where the auditor is not able to provide an answer to a particular question, his report shall indicate such fact together with the reasons  CARO (Companies Audit Report Order 2003)  Corporate financial practices Director s Report  Requirement of Companies Act Section 217, as regards the contents  Corporate financial practices  Indicative of director s responsibility towards ensuring that financial statements are drawn in accordance with the requirements of accounting standards and other statutory norms  Also respond to audit qualifications and make a declaration about fulfillment of their responsibility towards quality of financial statements Corporate Governance Report  Mandated by SEBI through stock exchanges via the listing agreement for the listed companies (Clause 49 of Listing agreement)  Seeks to report the effectiveness with which the management is discharging its responsibilities of running the corporate affairs transparently  In 1996 CII took a special initiative on Corporate Governance the first institutional initiative in the Indian industry  Kumar Mangalam Birla Committee on Corporate Governance