Draft Format of Director’s Report: Small Company

All Companies registered in India are required to conduct an Annual General Meeting and file the company annual return with the Ministry of Corporate Affairs. In the Company’s Annual General Meeting, the Board of Directors of the Company are required to present the Directors Report to the shareholders along with audited financial statements and Auditor’s report. In this article, we look at a Directors Report Format that is acceptable under Companies Act, 2013.

Draft Format of Director’s Report Small Company 2021 (2020-21)

DIRECTORS’ REPORT

To

The Members
_________________PRIVATE LIMITED________________

Your Directors have pleasure in presenting this Annual Report together with the Audited Statement of Accounts of your Company for the year ended 31st March, 2021.

1. FINANCIAL RESULTS

The Financial Results of the Company during the Financial Year ended on 31st March, 2021 are as under:

(In Rs.)

PARTICULARS Current Year

2020-21 Previous Year

2019-20

Revenue from Operations (Net)

Other Income

Total Revenue

Less: Expenses

Profit before exceptional and extraordinary items and tax Exceptional Items

Profit before extra ordinary items and tax

Extraordinary items

Profit before tax

Less: Tax Expense

Profit (Loss) For The Period

2. STATE OF THE COMPANY’S AFFAIRS

1. The Company is engaged in the business of __________________. There has been no change in the business of the Company during the financial year ended 31st March, 2021.

2. There has been no change in the business of the Company during the financial year ended 31st March, 2021.

The highlights of the Company’s performance are as under:-

Revenue from operations increased by ______ from Rs. ________ lacs to Rs. _______ lacs.

Net Profit for the year increased by ________% from Rs. _________ lacs to Rs. _________ lacs.

Earnings per share have increased by ________% from Rs. _______ to Rs. ________.

The increase in revenue, net profit and EPS as mentioned above is accredited to increase in turnover in comparison to the last financial year.

3. DIVIDEND

The Board of Directors does not recommend any Dividend for the Financial Year 2020-21.

4 DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION(12) OF SECTION 143 OTHER THAN THOSE REPORTABLE TO THE CENTRAL GOVERNMENT

No material fraud by the company or on the company by its officers or employees has been noticed or reported during the course of audit.

5. TRANSFER TO RESERVES

During the year under review, the Company has profit Rs. _______________. The amount has been transferred to Reserves and Surplus.

6. SHARE CAPITAL

The Paid-up Equity Share Capital as on 31st March, 2021 was _______________

7. FINANCE

Cash and cash equivalents as at 31st March, 2021 was ___________________. The Company continues to focus on judicious management of its working capital.

8. DEPOSITS

No Deposit has been accepted by the company during the Financial year under scrutiny. No Amount remained unpaid or unclaimed as at the end of the year. There has been no default in repayment of deposit or payment of interest thereon during the year.

9. WEB LINK OF ANNUAL RETURN, IF ANY

The Company is having website i.e.___________________ and annual return of Company has been published on such website. Link of the same is given below:

OR

The Company doesn’t having any website.

10. MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any Investment, given guarantee and securities during the year under review. There for no need to comply provisions of section 186 of Companies Act, 2013.

OR

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company is duly constituted. None of the Directors is disqualified from being appointed as such under the provision of Section 164 of the Companies Act, 2013.

Present Board Consist of below mentioned Directors:

S. No. Name Designation Date of Appointment
1.
2.
3.

There is no change in Board of Directors of the Company during the Financial Year 2020-21.

13. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Seven Board Meetings were held during the Financial Year ended March 31, 2021 i.e. (Dates of Board Meetings).

The maximum gap between any two Board Meetings was less than one Hundred and Twenty days.

The names of members of the Board, their attendance at the Board Meetings are as under:

Name of Directors Number of Meetings attended/ Total Meetings held during the F.Y. 20-21

Ms. (Name of Director) 1/7

Ms. (Name of Director) 7/7

Ms. (Name of Director) 6/7

14. BUSINESS RISK MANAGEMENT

The Company does not have any Risk Management Policy, as the elements of risk threatening the Company’s existence, is very minimal.

15. SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company has no Subsidiary/Joint Ventures/Associate Companies as on 31st March, 2021. As such the company is not required to consolidate its account with any other company.

16. STATUTORY AUDITORS
_________________________________________, Chartered Accountants (FRN: ______________), _________________ be and are hereby appointed as the Statutory Auditors of the Company to hold office till the conclusion of Annual General Meeting of the Company to be held in the year 2025.”

The Company has received a Certificate from them to the effect that their appointment, if made, would be as per the requirements specified under Section 141 of the Act and the Rules framed there under for reappointment as Auditors of the Company.

The Notes on Accounts read with the Auditors’ Reports are self-explanatory and therefore, do not call for any further comments or explanations. The Statutory Auditor’s Report does not contain any qualification, reservation or adverse remark.

17. BOARD’S COMMENT ON THE AUDITORS’ REPORT

The observations of the Statutory Auditors, when read together with the relevant notes to the accounts and accounting policies are self explanatory and do not call for any further comment.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A) Conservation of Energy:

The Company is using Electricity from the Electricity board.

B) Technology absorption:

The Company is using its own knowledge & Technology & There is no Technology absorption from outside.

C) Foreign Exchange Earnings And Outgo

There was no foreign inflow or outflow during the year under review.

19. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management.

The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting Financial Statements.

20. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provisions of Section 135 of the Act, with regard to Corporate Social Responsibility (CSR) are at present not applicable on the Company.

21. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year ended 31st March, 2021 were on an arm’s length basis and were in the ordinary course of business. Therefore, the provisions of Section 188 of the Companies Act, 2013 were not attracted. Further, there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, or other designated persons which may have a potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required. However, the disclosure of transactions with related party for the year, as per Accounting Standard -18 Related Party Disclosures is given in Note no 24 to the Balance Sheet as on 31st March, 2021.

OR

The particulars of contracts or arrangements with related parties referred to in sub section (1) of section 188 entered by the Company during the financial year ended 31st March, 2021 is annexed hereto as Annexure ___ in prescribed Form AOC-2 and forms part of this report.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

There has been no change in the constitution of Board during the year under review i.e. the structure of the Board remains the same.

In view of the applicable provisions of the Companies Act, 2013, the Company is not mandatorily required to appoint any whole time KMPs.

(to disclose information pertaining to appointment and resignation of Director(s)/KMP(s), if any during the year under review)

(to disclose resignation of the director(s), if any occurred between the end of the financial year to which this report relates and the date of this report)

23. COST RECORD

The provision of Cost audit as per section 148 doesn’t applicable on the Company.

OR

The provision of Cost audit as per section 148 applicable on the Company and company has maintained proper records and account of the same as required under the act.

24. SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company’s operations in future.

26. Material order passed by the regulators or court or tribunals

The details of a significant material order passed by the Hon’ble High Court which may impact the going concern status of the Company and its future operations is provided in Annexure ___and forms part of this report.

27. PARTICULARS OF EMPLOYEES

The Company has no employee in respect of whom the statement under Section 197 of the Act is required to be furnished.

28. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Act, that:

(a) In the preparation of the Annual Accounts for the Financial Year ended 31st March, 2021, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2020-21 and of the Profit and Loss of the Company for that period;

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The Directors have prepared the annual accounts on a going concern basis;

(e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and.

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

29. ACKNOWLEDGEMENT

The Directors acknowledge with appreciation, the co-operation and assistance received from the Government, Banks, Authorities and other Business Constituents and arcade during the year.

The Directors wish to place on record their appreciation of the contribution made by employees, customers and suppliers for their continuous support given by them to the Company at all levels during the period under report.
Your Board of Directors also takes this opportunity to convey their gratitude and sincere thanks for the co-operation & assistance received from the shareholders. The Board acknowledges your confidence and continued support and looks forward for the same in future as well.

By the order of the Board of Directors

For ___________________ PRIVATE LIMITED

xxxxxxxxxxx xxxxxxxxxxxxx

xxxxxxxxxx XXXXXXXXXXXXX

XXXXXXXXXX XXXXXXXXXXXXX

DATE

PLACE

Author Bio

Qualification: CS
Company: Deepak Bhagat & Associates
Location: Delhi, Delhi, India
Member Since: 15 Jun 2020 | Total Posts: 4

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