Draft or sample Sample of Board / Directors’ Report

he Directors’ Report is a crucial document that provides shareholders and stakeholders with insights into a company’s performance, governance, and future outlook. Under the Companies Act, 2013, it is mandatory for companies to prepare and present this report alongside their financial statements, ensuring transparency and accountability in corporate governance. This report typically includes various disclosures, such as the state of the company’s affairs, financial results, key managerial decisions, and significant changes during the financial year.

In this article, we present a comprehensive draft or sample of a Board of Directors’ Report that adheres to the requirements of the Companies Act, 2013. This sample serves as a valuable reference for companies looking to draft their reports, helping them to understand the essential elements and compliance obligations involved. By exploring this draft, readers will gain insights into the structure, content, and language necessary to communicate effectively with their stakeholders and fulfill legal obligations under the Act.

DIRECTORS’ REPORT

BOARD OF DIRECTORS:

STATUTORY AUDITORS:  

______________________ (Name of Statutory Auditor / Firm)

Chartered Accountants,

______________________ (Firm Registration Number)

______________________ (Address of Firm)

BANKER:

___________________ (Name of Banker)                               

REGISTERED OFFICE:

_____________________ (Address of Registered Office of the Company)

CORPORATE OFFICE:

_____________________ (Address of Corporate Office of the Company, if any)

WORK:

_____________________ (Address of Working Place of the Company)

To,

The Members of ______________________ (Name of Company)

On behalf of the Board of Directors (the “Board”) of the Company, it gives me immense pleasure to present the ____________ (Number of Directors’ Report) Directors’ Report of your Company along with the audited standalone and consolidated financial statements, for the financial year ended March 31, 20____ (Year).

• Financial Highlights

During the year under review, performance of your company as under:

(Amount in Rupees in ________)

• Change in nature of business, if any

There is no change in the business of the Company during the year under review.

• Dividend

The company does not propose any dividend during the year 20___ – 20____.

• Amount transferred to reserves

The Board of Directors of your company, has decided not to transfer any amount to the Reserves for the year under review.

• Deposits

During the year under review, your Company neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as ‘Deposits’ in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

• Compliance with Secretarial Standards

Your Company has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India (SS-1, SS-2 and SS-4) respectively relating to meetings of the board of directors, general meeting and directors report.

• Board of Directors and Company Secretary:

Presently, the Board of Directors consists of _________ (Number of Directors) directors namely:

During the financial year 20___ – 20___, there has been no change in the composition of the Board of Directors.

• Number of Board Meetings

The Board meets at regular intervals to discuss and decide on Company/business policy and strategy apart from other Board business. The Board met ______ (Total Number of Board Meetings) times during the year 20___ – 20___

During the year 20____ – 20____ the Board of Directors met on the following dates:

• Declaration by the Company

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164(2) of the Act read with Rule 14 of Companies (Appointment and Qualifications of Directors) Rules, 2014.

• Changes in Share Capital, if any

During the year under review, there has been no change in the authorized, issued, subscribed, or paid-up share capital of the Company.

• Disclosure relating to equity shares with differential rights

The Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

• Disclosure relating to Sweat Equity Shares

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

• Disclosure relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme

The Company does not have any Employee Stock Option Scheme or Employee Stock Purchase Scheme. Hence, no information as per the provisions of Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

Disclosures in respect of voting rights not directly exercised by employees. There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

• Extract of Annual Return

The  annual  return  of  your  Company  as  on  31st  March  20____,  in accordance  with  Section  92(3)  of  the  Companies  Act,  2013  read with  the  Companies  (Management  and  Administration)  Rules, 2014,  is  available  on  your  Company’s  website  at  _____________________  (Website, if any)

• Particulars of Loan, Guarantees and Investments under Section 186

During the year under review, there has been no loan, Guarantees and investment under the provisions of Section 186 of the Companies Act, 2013.

• Particulars of contracts or arrangements or transactions with Related Parties

During financial year 2023-24, all contracts / transactions entered by your Company with related parties under Section 188(1) of the Companies Act, 2013 were in the ordinary course of business and on an arm’s length basis. Thus, there are no transactions required to be reported in Form AOC-2.

Attention of members is drawn to the disclosure of transactions with related parties set out in Note No. _____ (Note Number of Related Party Transactions in Balance Sheet)  of the Financial Statements, forming part of the Board’s Report.

• Details of significant & material orders passed by the regulators or courts or tribunal

There are no significant and material orders passed by the regulators or courts or tribunals which would impact the going concern status and company’s operations in future.

• Material changes and commitment between the date of the Directors’ Report and end of the financial year

After the close of the Financial Year 20____ – 20____, the Company has amended its objects as outlined in its Memorandum of Association. This change was approved by the shareholders at the Extra-Ordinary General Meeting held on ____________ (Date of Extra-Ordinary General Meeting), in accordance with the provisions of the Companies Act, 2013.

The additional objects are intended to provide the Company with greater flexibility in expanding its business into “________________ (Additional Object)”, which will contribute to long-term sustainable growth and value creation for our shareholders.

The necessary filings and approvals with the Registrar of Companies and other relevant authorities have been completed, reflecting the new business focus.

• Subsidiary, Associates and Joint Ventures

During the year under review, the Company does not have any Subsidiary, Joint Venture or Associates Companies

• Company’s policy relating to Directors appointment, payment of remuneration and discharge of their duties

The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee is not applicable to the Company.

• Details of policy developed and implemented by the company on its Corporate Social Responsibility (CSR) initiatives

During the year under review, the provisions of Section 135 of the Companies Act, 2013, and the rules made thereunder concerning Corporate Social Responsibility (CSR) are not applicable to the Company. The Company does not meet the criteria laid out in the said section, i.e., net worth, turnover, or net profit thresholds specified under Section 135(1) of the Companies Act, 2013. Hence, the Company is not required to constitute a CSR Committee or undertake any CSR activities as per the said provisions.

• Risk Management Policy

The Company has voluntarily adopted a Risk Management Policy to ensure the effective identification, assessment, and mitigation of potential risks that could impact its operations and business continuity. Although the provisions of risk management under Section 134(3)(n) of the Companies Act, 2013 are not mandatorily applicable to private companies, the Board of Directors recognizes the importance of having a proactive approach to risk management. The policy is designed to safeguard the Company’s assets, stakeholders, and long-term interests.

• Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The provisions of constitution of internal compliant committee is not applicable to the Company.

• Details of adequacy of internal financial controls with reference to the financial statements

The Board of Directors has laid down adequate internal financial controls, which are being followed by the Company. These controls are designed to ensure the orderly and efficient conduct of the business, including adherence to the Company’s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The internal financial controls with reference to the financial statements are adequate and were operating effectively throughout the financial year under review. The Company regularly reviews the effectiveness of these controls to ensure they are robust and responsive to the Company’s needs.

• Vigil Mechanism

Although the provisions of Section 177 of the Companies Act, 2013 regarding the establishment of a vigil mechanism are not mandatorily applicable to private companies, the Board of Directors has voluntarily implemented an effective Vigil Mechanism / Whistle-blower Policy. This mechanism ensures that directors and employees can report genuine concerns about unethical behaviour, actual or suspected fraud, or violation of the Company’s code of conduct, while maintaining confidentiality and providing protection against retaliation.

• Declaration of independence by Independent Directors:

The provisions of Section 149 of the Companies Act, 2013 with respect to appointment of Independent Directors are not applicable to your Company. Therefore, the requirement of obtaining the declaration confirmation from the Independent Director, is not applicable to the Company.

• Statement on opinion of Board of Directors with regard to integrity, expertise and experience of Independent Directors appointed during the Financial Year:

The provisions of Section 149 of the Companies Act, 2013 with respect to appointment of Independent Directors are not applicable to your Company. Therefore, the disclosure requirement of opinion of the Board of Directors with regards to integrity, expertise and experience of Independent Directors, is not applicable to the Company.

• Auditors and Auditors’ Report

Statutory Auditors

The Board of Directors recommends the re-appointment of _________________ (Name of Firm / Auditor), Chartered Accountants, as the Statutory Auditor of the Company for a further term of five years, from the conclusion of ____ Annual General Meeting of the Company till the conclusion of the _____ Annual General Meeting to be held for the financial year 20___ – 20___, subject to the approval of the shareholders at the forthcoming Annual General Meeting.

The Auditor has provided a certificate confirming their eligibility for re-appointment as per the provisions of the Companies Act, 2013, and has been performing their duties with diligence and professionalism. The Board believes that the continued engagement of _________________ (Name of Firm / Auditor), Chartered Accountants, will ensure the maintenance of high standards of financial reporting and compliance.

• 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(5) of the Companies Act, 2013:

i. that in the preparation of the annual financial statements for the year ended 31^st March, 20____, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that the directors had selected such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 20____ and of the profit of the Company for the year ended on that date;

iii. that the directors had taken proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the directors had prepared the annual financial statements on a going concern basis;

v. they have laid down internal financial controls, which are adequate and are operating effectively; and

vi. that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

• Particulars of Employees:

Particulars are required to be given under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Key Managerial Personnel) Rules, 2014 are not applicable.

• Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

The provisions relating to Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo, as specified under Section 134(3)(m) of the Companies Act, 2013, are not applicable to the Company. As a private company, we do not have any significant transactions or operations that would necessitate these disclosures. However, the Company remains committed to sustainable practices and efficient resource management.

• The details of the application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the Financial Year:

During the Financial Year 20___ – 20___, there was no application made and proceeding initiated /pending under the Insolvency and Bankruptcy Code, 2016, by any Financial and/or Operational Creditors against your Company.  As on the date of this report, there is no application or proceeding pending against your company under the Insolvency and Bankruptcy Code, 2016.

• The details of difference between the amount of valuation at the time of one-time settlement and the valuation done at the time of taking a loan from the Banks or Financial Institutions along with the reasons thereof:

During the Financial Year 20_____ – 20____, the Company has not made any settlement with its Bankers from which it has accepted any term loan.

Acknowledgement:

Your Directors take this opportunity to thank the customers, shareholders, bankers, business partners/ associates, financial institutions and Central and State Governments for their consistent support to the Company.

The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board of Directors

_________________________ (Name of Company)

__________________ (Signature)
__________________ (Name of Director)
__________________ (Designation)
__________________ (DIN)

__________________ (Signature)
__________________ (Name of Director)
__________________ (Designation)
__________________ (DIN)

Date: ________________
(Date of Signing)

Place: ________________
(Place of Signing)