Directors Report Format
Every Company registered in India are required to conduct an Annual General Meeting as well as 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 the following article, we look at a Directors Report Format that is satisfactory under Companies Act, 2013.
On behalf of the Board of Directors, it is my pleasure to present the XXth Annual Report of Company Name (“the Company”) together with the Audited Statement of Accounts for the year ended March 31, 20XX.
Highlights of Financial Performance
The Company has recorded the following financial presentation, for the year ended March 31, 20XX:
|Particulars||Year Ended 31st March, 20XX||Year Ended 31st March, 20XX|
|Profit Before Interest, Depreciation & Tax (EBITDA)|
|Provision for Income Tax|
|Profit/(Loss) After Tax|
|Transferred to General Reserve|
Summary of Operations
In the Case of Profit
- During the year, net revenue from operations of your Company amplified by ____%, from Rs ____ Crores to Rs. ____ Crores.
- The Company’s profit after tax stood at Rs. ____ crore vis-à-vis Rs. _____ crore in the earlier year, registering a growth of ______%.
In the Case of Loss
- During the year, the net revenue from the operation of your Company reduced by ____%, from Rs ____ Crores to Rs. ____ Crores due to ___________.
- The Company has recorded a loss of Rs.______ in the financial year ended 31st March, 20XX.
In the Case of No Activity
- During the year, the company did not begin any operations. Therefore, the company has not recorded any revenue.
- The company has charged a total of Rs._____ to the profit & loss account as an expense which was incurred for setting up of the business.
State of Affairs
The Company is occupied in the business of:
- Business Activity 1
- Business Activity 2
There have been no changes in the business of the Company during the course in the financial year ended 31st March, 20XX.
In case the Dividends were declared
Your Directors are pleased to suggest a dividend of Rs.XXX per share for the current year. The dividend if accepted and declared in the forthcoming Annual General Meeting would result in a Dividend outflow of Rs. XX and Dividend Distribution Tax (DDT) of Rs. XX aggregating a total outflow of Rs. XXXX.
In case the Dividends were Not Declared
- No dividends were declared for the current financial year due to the preservation of profits and continued investment in the business.
- No dividend was declared for the current financial year because of loss incurred by the company.
Details of the Subsidiaries, Joint Ventures or Associate Companies (Only if applicable)
If The Company does not have any Subsidiary, Joint Venture or Associate Company.
In case Company has any Subsidiaries, Joint Ventures or Associate Companies
The names of companies which have are the subsidiaries, joint ventures or associate companies of the parent company during the year under review are provided below:
|S.No||Name of Company||Type||Remarks|
Internal Financial Control
The Company has in place sufficient internal financial control with reference to financial statements. Throughout the year, such controls were tested and no reportable material weakness in the design or procedure was noticed.
Directors and Key Managerial Personnel (KMP)
There have been no changes in the constitution of the Board of Directors throughout the year under review i.e. the structure of the Board remains identical.
In the Case of Changes to Board of Directors
The following changes have been made to the Board of Directors of the Company throughout the year:
|Sr. No||Name||Designation||Appointment or Resignation||Appointment Date or Resignation Date|
Meeting of the Board of Directors
A sum of XX Board Meetings was held during the financial year finished 31st March 20XX. The highest gap between any two Board Meetings was less than one 120 days. The names of the members of the Board, their presence at the Board Meetings are as under:
|Name of Directors||Number of Meetings Attended/ Total Meetings Held|
|Ms.____________||XX / XX|
|Ms.____________||XX / XX|
Board’s Comment on Auditor’s Report
The comment of the Statutory Auditors, when reading together with the relevant notes to the accounts and accounting policy is self-explanatory and does not call for any additional comment.
In the case of Adverse Remark or Qualified Report
(Description or comment by the Board on every qualification, reservation, adverse remark or condition made by the statutory auditor in his report and/or by the secretarial auditor in the Secretarial Audit Report).
The Auditors, M/s._____________, Chartered Accountants, Firm Registration No. _________________, holds the office until the conclusion of this Annual General Meeting. The Directors recommended that M/s._____________, Chartered Accountants, Firm’s Registration No. _________________, be ratified as the Statutory Auditors of the Company at the approaching Annual General Meeting of the Company to hold office till the termination of the next Annual General Meeting of the Company.
Loans & Investment
The Company has not made any investment, provided guarantee and securities during the year under review. Therefore no need to fulfill with provisions of Section 186 of Companies Act, 2013.
In case the Company has Made Loans and Investments
Particulars of Loans, Guarantees, and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the comments to the Financial Statements.
Extract of the Annual Return
Extract of the Annual Return in Form No.MGT-9 as obligatory under Section 92 of the Companies Act, 2013 for the financial year ending March 31, 20XX is annexed and forms part of this report.
Related Party Transactions
Every related party transactions that have been entered into during the financial year ended 31st March, 20XX were on an arm’s length basis and were in the normal course of business. Thus, the provisions of Section 188 of the Companies Act, 2013 were not attracted.
Also, there are no materially important related party transactions during the year under review made by Company with Promoters, Directors, or other designated persons which may have a possible conflict with the interest of the Company at large. Therefore, disclosure in Form AOC-2 is not required. Though, the disclosure of transactions with a related party for the year, as per Accounting Standard(AS)-18 Related Party Disclosures is given in Note no 24 to the Balance Sheet as on 31st March, 20XX.
In the case of the existence of related party transactions
The facts of contracts or arrangements with related parties referred to in subsection (1) of section 188 of the act entered by the Company during the financial year ended 31st March; 20XX is attached in approved Form AOC-2 and forms part of this report.
Conservation of Energy and Technology Absorption
The particulars as necessary under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of the conservation of energy and technology absorption have not been furnished bearing in mind the nature of activities undertaken by the company throughout the year under review.
In case the company is into manufacturing
The information relating to conservation of energy and technology absorption, as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure and is attached to the report.
Foreign Exchange Earnings and Outgo
The company had an entirety of foreign exchange earnings and outgo as provided below during the year ended 31st, March 20XX:
|Foreign Exchange Earnings||The amount in Rs.|
|Foreign Exchange Outgo||The amount in Rs.|
Risk Management Policy
The Company has developed and implemented a risk management policy which identifies main risks which may threaten the continuation of the Company. The same has also been adopted by your Board and is also subject to its reconsider from time to time. Risk mitigation procedure and measures have been also formulated and undoubtedly spelled out in the said policy.
The Company has not received any deposits during the year under review.
Material Changes and Commitments
No material changes and commitments touching the financial position of the Company occur between the end of the financial year to which this financial statement relates and the date of this report.
In the situation where any material changes or financial occurrences arise
The following material changes and commitment occurred during the year under review touching the financial position of the Company.
- Material Changes 1:
- Material Changes 2:
Important and Material Orders Passed by Regulators, Courts, and Tribunals
No significant and material order has been approved by the regulators, courts, tribunals impacting the going concern rank and Company’s operations in future.
In case any orders were passed
The details of an important material order passed by the Hon’ble High Court which may impact the going concern standing of the Company and its future operations is provided in Annexure and forms part of this report.
Corporate Social Responsibility (CSR)
The Corporate Social Responsibility Committee (CSR Committee) of Company has formulated and suggested to the Board, a Corporate Social Responsibility Policy (CSR Policy) representing the activities to be undertaken by the Company, which have gained the approval of the board.
During the year, the Company spent a total of Rs.XXXX identified as CSR activities. The Annual Report on CSR activities is covered as per prescribed format as Annexure and forms part of this report.
If CSR Provisions are Not Applicable
CSR requirements are not applicable to the Company.
Safe & Conducive Workplace
The Company is dedicated to providing a safe and conducive work environment to its employees. During the year under reconsider, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal ) Act, 2013.
Your Directors states that no revelation or reporting is required in respect of the following items as there were no dealings on these items during the year under review:
- The issue of shares, including sweat equity shares, to employees of the Company under any scheme.
- The Company has no supplementary and neither the Managing Director nor the Whole-time Directors of the Company obtain any remuneration or commission from any of its subsidiaries.
Directors Responsibility Statement
According to Section 134(3) (c) of the Companies Act, 2013 the Board of Directors of the Company confirms that-
- In the grounding of the annual accounts for the year ended March 31, 20XX, the appropriate accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no matter departures from the same.
- The Directors have chosen such accounting policies and applied them constantly and made judgments and estimates that are reasonable and careful so as to give a true and fair view of the state of affairs of the Company as at March 31,20XX and of the yield of the Company for the year ended on that date.
- The Directors have taken proper and enough care for the maintenance of adequate accounting records in accordance with the necessities of the Act for safeguarding the assets of the Company to prevent and detect fraud and other irregularities.
- The Directors have organized the annual accounts on a ‘going concern’ basis.
- The Company being unlisted, subclause (e) of section 134(3) of the Companies Act, 2013 relating to laying down internal financial controls is not relevant to the Company.
- The Directors have devised appropriate systems to ensure compliance with the provisions of all applicable laws and that such system is sufficient and operating efficiently.
Your Directors would like to state their sincere appreciation for the support and co-operation received from the customers, employees, banks, Government authorities, vendors and members throughout the year under review.
For and on behalf of the Board
|Director Name:||Director Name:|
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