Directors Report:
A Directors Report is prepared and presented to shareholders mainly to explain or make the shareholders aware of the business and affairs of the company, its subsidiary and the scope of the Company business. The Report shall be based up to the date of signing of financial statements. It shall be a detailed report about the affairs of the Company and what steps the Company has undertaken to mitigate the Risk.
Things to be reported in Directors Report:
As per Section 134 (3) of the Companies Act, 2013 the Directors Report shall include
a) The web address if any where the annual report as per section 92 (3) has been placed
b) Highlights of the performance of the subsidiaries, associates, join ventures and their contribution to the overall performance of the Company
c) The number of meetings conducted during the financial year
d) Directors Responsibility Statement
e) Details of any frauds reported by the auditors other than those which are reportable to the Central Government within 60 days of such discovery (i.e frauds above 1 crore to be reported to the CG)
f) A statement of declaration given by the independent Directors, if any
g) Every listed company and every other public company having a paid up share capital of twenty five crore rupees or more calculated at the end of the preceding financial year shall report a statement on Company Policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors and such other matters
h) A Statement that the internal financial control are adequate with reference to financial statement.
i) The Board shall provide an explanation on every qualification, reservation or adverse remark made by the auditor, or the CS in his secretarial report, Particulars of loans, guarantees and investment made, contracts or arrangements with related parties, the state of companies affairs, any amount which the company carries to the reserves, any amount which the board recommends as a dividend, any material changes if any which affects the financial position of the Company upto the date of the report to be reported, any measures taken to conserve the energy, reserves, foreign exchange earnings and outgo (however the requirement of furnishing of details will not apply to a government company engaged in producing defense equipment), technology transfer if any, the statement on the development and implementation of risk management policy for the company, any CSR initiatives and committee during the year, a statement indication a manner in which annual evaluation of Directors, committee members is carried out and such other matters as may be necessary.
j) The names of the companies which have become or ceased to become its subsidiaries joint ventures or associate companies during the year
k) Details with respect to deposit accepted during the year, remained unclaimed, if any default in repayment of deposits or payment of interest thereon.
l) Any order passed by any courts, regulators or tribunals impacting the going concern of the Company and operations in future.
m) In case of disclosures made in the financial statements the same not be mentioned in Directors report, only a statement indicating that the same is mentioned in the financial statement is to be made.
n) The Board shall report any changes in the nature of business, the details of directors appointed and resigned during the year
o) A statement indicating the proficiency of the test undertaken by the Independent Directors from the online test conducted by the institute as the central government may prescribe.
p) If any of the Companies policy is made available on the Companies Website a Complete policy is not be mentioned in the BR, however a link or basic statement indicating the important and relevant points to be mentioned in the report.
q) The Central Government under the Section 134 (3A) of the Companies Act, 2013 and as per Rule 8A of the Companies (Accounts) Rules, 2014 prescribe an abridge Board Report for the purpose of compliance by one person company and small company
r) A disclosure whether maintenance of cost records as specified by the Central Government is required by the Company and whether the same is maintained
s) A statement whether the company has complied with POSH Act and the company has constituted the Internal Complaints Committee
t) The details of application made or any proceeding pending under IBC along with their status as at the end of the financial year
u) The details of difference between amount of the valuation done at the time of one time settlement and the valuation done at the time of loan taken from banks or financial institutions along with reasons thereof.
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