The Ministry of Corporate Affairs, Government of India, issued notifications dated 24th March, 2021 to amend Companies (Accounts) Rules, 2014  to enhance the disclosures required to be made by the Company in Board Report;

Purpose of Amendment vide Companies (Accounts) Amendment Rules, 2021:

By these amendments MCA increasing stringency in compliances and adding numerous additional disclosures in Financial Statement, Directors Report and Audit Report. The main purpose behind these amendments is more transparency.

Ministry has issues Notifications:

S. No. Date of Notification Particular Purpose (Amendment in)
i. 24.03.2021 Companies (Account) Amendment Rules, 2021 Directors Report


Above mentioned amendments shall come into force w.e.f. 01st day of April 2021.

Que: Financial year end on 31st March 2021. Directors Report signed on 25th August 2021. Whether Company have to give effect of amendment in Directors Report?

Ans: Above mentioned amendment shall be applicable on Companies for financial year start on or after 01st April 2021. Therefore, this amendment shall effect the financial statement as on 31st March 2022 i.e. (f.y. 2021-22).

Therefore, one can opine that Directors Report for financial year ending 31.03.2021 shall be same as per earlier disclosures.

Amendment in Rule 8 i.e. Matters to be Included in Board’s Report. In rule 8, sub rule 5 after clause x, two new clauses added.

New Clauses:

(xi) the details of 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.

(xii) the details of difference between the amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

Disclosure on above mentioned two clauses are required to give in Directors Report of Companies along with other disclosures.

Ques:2 Whether above mentioned amendment in Directors Report required to be covered in Directors Report prepared for f.y. ended 31.03.2021?

Ques:3 Whether this amendment applicable on Directors Report of every company or exemptions are given to some classes of companies?

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April 2021