The purpose of a Director’s Report is to explain to shareholders the business and affairs of a company and its subsidiaries, as well as the scope of the company’s operations. Based on the signing of financial statements, the Report shall be prepared. In this report, the Company will discuss its affairs and what steps it has taken to mitigate its risks.
As per the recent amendment & in compliance with the latest statutory requirement, the following matters should be included in the Directors’ report.
Items to Be Reported in Directors’ Report U/S 134:
According to Section 134 (3) of the Companies Act 2013, read with Rule Companies (Accounts) Rules, 2014, the Director’s Report would consist of:
- If there is any web address that the yearly report under section 92(3) would have been placed.
- The company’s subsidiaries, associates, joint ventures, and their contribution to its overall performance
- In the fiscal year, the number of meetings held.
- Directors Responsibility Statement
- The information of any fraud reported via auditors committed in the company by an officer or employee u/s 143(12) of the Companies Act 2013.
- If there is any statement in the declaration provided by the independent directors.
- Any listed company, as well as every other public company, report the statement on the company policy on the director’s appointment and remuneration, along with the class for finding out the qualifications, positive attributes, independence of directors, etc.
- A statement of internal financial control is adequate with regard to financial statements.
- An elaboration has been given by the board on every qualification, reservation, or negative remark that the auditor has incurred or the CS in his secretarial report
- Particulars of loans, guarantees and investments created
- Particulars of contracts or arrangements with corresponding parties
State of Company Affairs
- Any amount that the company secures for the reserves, or any amount that has been suggested by the board as a dividend
- Any material revisions, if any, that affect the fiscal functioning of the company up to the date of the report that is obligated to report
- Any actions opted to conserve the energy, reserves, foreign exchange earnings and outgo
- If there is any technology transfer, then the statement on the development and execution of the risk management policy for the company, if there are any CSR initiatives and committees for the year, then a statement expressing in a way that secures a yearly evaluation of Directors, committee members would be taken along with the additional cases as might be essential.
Summary of its Financials
- The names of the companies which has already been made would become or cease to become their subsidiaries, joint ventures or related firms in the year.
- The information for the deposits accepted in the year would remain unclaimed if any default in the repayment of the deposits or payment of the interest on them.
- The court that issued any order, regulators, or tribunals that affect the current ongoing case of the company, along with the functions in subsequent times.
- The concern of the disclosures that have been incurred in the financial statements would not be identical in the director’s report, only a statement that shows that it would be specified in the financial statements that would be required to incur.
- The board would report any amendments in the kind of business, and the information of directors appointed and resigned in that year.
- If on the website of the company any of the company’s policies are included, then a complete policy is not shown in the BR, but in the link or the basic statement that shows the essential and related points to be specified in the report.
- The Central Government, under Section 134 (3A) of the Companies Act, 2013 and as per Rule 8A of the Companies (Accounts) Rules 2014, defines Board Report as the intent to comply via one individual company and a small company
- A disclosure that if the cost of maintenance records, which have been mentioned via the Central Government, would be needed by the company and if that would be maintained.
- A statement that if the company had followed and POSH Act along with the company would have formed the internal complaints committee.
- The information of the application incurred or any proceeding due beneath IBC, with their status as at the completion of the fiscal year.
- The information on the difference between the amount of the valuation performed at the time of the one-time settlement, including the validation performed during the loan opted via banks or financial institutions, as well as the causes of it.
- Provide details of contracts & arrangements with related parties.
- Information regarding compliance with the secretarial standards.
- Disclosures regarding compliance with the provisions relating to the Maternity Benefit Act 1961.
Gen Complaw with XBRL software improves the efficiency of CS’s work. It allows users to create financial data from the current and previous year data in XBRL format. A backup and restore feature is also available in the Gen Complaw ROC software. In addition, the software uses electronic formats for reporting, which has changed the way businesses report. Moreover, the software allows the creation of direct reports and certificates, prepared certificates, CARO reports, etc.
