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Taxguru - In-How To Prepare Directors Report As Per Companies Act 2013
Taxguru - In-How To Prepare Directors Report As Per Companies Act 2013
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The Directors Report is a document produced by board of directors under the requirements of Companies Act,
2013 and Rules, which details the state of the company and its compliance with a set of financial, accounting and
corporate social responsibility standards.
The Directors Report arose out of a general move for greater transparency in corporate governance. It is useful for
shareholders to find out issues such as whether the company has good finances, whether the market has potential,
and whether the business has the structural capacity to expand into new opportunities. In order for shareholders to
make informed decisions when casting their votes at annual or other meetings, the Directors Report provides part of
that essential minimum standard of information. It is complemented by Company Accounts.
The Article discusses on how to Prepare Directors Report as Per Companies Act, 2013 and is as follows :I. ADDRESS TO MEMBERS:
Language:
Your Directors have pleasure in presenting the (No. of Financial Years) Annual
Report together with the Audited Statement of Accounts of your Company for
the financial year ended March 31, 2016
Check the Statement of Profit & Loss Account for the year ended March
31, 2016. You will find required figures on the FACE of Statement of
Profit & Loss Account.
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Particulars
Year
ended
Year
ended
31st
March
2016
31st
March
2014
Turnover
Profit Before
Tax
Less: Current
Tax
Deferred Tax
Income Tax
earlier years
Profit For The
Year
Add: Balance
in Profit and
Loss Account
Sub Total
Less:
Appropriation
Closing
Balance
Language:
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134(3)(I)
The State
of The
Companys
Affairs;
OR
The decrease in revenue, net loss and
EPS as mentioned above is debited to
decrease in turnover in comparison to the
last financial year.
Language:
The amount, if
any, which it
recommends
should be paid
by way of
dividend;
First:
OR
In view of the planned business growth, your Directors
deem it proper to preserve the resources of the
Company for its activities and therefore, do not
propose any dividend for the Financial Year ended
March 31, 2016.
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Purpose
Language:
How to find
out
Subsidiary,
JV and
Associates
First Check:
OR
The names of companies which have become or ceased to be
the Companys subsidiaries, joint ventures or associate
companies during the year under review is provided below:
S.N
Name of
the
Company
Subsidiary
/JV
/Associate
Become/Ceased
Effective
Date
Check the
Investment of
the Company
from Non
Current
Investment in
the Balance
Sheet, check
the relevant
Note and
analyze about
Subsidiary,
Associate and
Joint Venture
as per
definition
given u/s
2(87) and
2(6) of the
Companies
Act, 2013.
Second:
Check from
the
(Accounting
Standard)
AS-18.
Rule 8(5)(vii)
ICAI guidance note on
adequacy of internal
financial controls with
reference to financial
statements can be
referred for this Purpose.
Language:
How to Check?
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Purpose
Language:
How to Check?
Section 134(3)
(g) particulars of
loans,
guarantees or
investments
under section
186;
Language:
How to
check?
Rules
8(5)(i)
Check the
Followings:
The Board may provide details relating to change in the business carried on by the
company or its subsidiaries. This shall also contain details pertaining to classes of
business in which the company has an interest.
i. Main
object of the
Company
ii. Notes of
the
Financial
Statement
Language:
How to check?
Section- 134(3)(J)
How to check?
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During the Financial Year 2014-15, the share capital of the Company has
been increased from ____ to ____, pursuant to
allotment of____ equity shares of Rs ____ each under Private
Placement/Preferential allotment/Rights issue /Employee Stock Option
Scheme of the Company
Language:
How to check?
Section 134(3)(a)
Language:
How to check?
Section 134(3)(a)
Language:
How to
check?
Section- 134(3)(h)
All related party transactions that were entered into during the
financial year ended 31st March, 2016 were on an arms length basis
and were in the ordinary course of business. Therefore, the provisions
of Section 188 of the Companies Act, 2013 were not attracted.
Further, there are no materially significant related party transactions
during the year under review made by the Company with Promoters,
Directors, or other designated persons which may have a potential
conflict with the interest of the Company at large. Details of the
transactions are given in AOC-2
Check the
following :
The Particulars of
contracts or arrangement
s with related party
referred to in Section
188(1) of the Companies
Act, 2013 for the
Financial Year 2014-15 in
the prescribed format
AOC-2, has been
enclosed with the report.
i. AS-18
ii. Minutes
of Board
Meeting &
General
Meeting (If
any
Resolution
passed)
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Provision:
Language:
How to
check?
Check
the
Auditor
Report
Language:
How to
check?
134(3)(L)
Check
the
following
i. Trial
Balance
ii.
Financial
Position
iii.
Market
Condition
Language:
How to
check?
134(3)(M)
Check the
following
i.
Financial
of the
Company.
ii. Check
with
directors.
c0 Foreign Exchange
Earnings/ Outgo:
XVII. RISK MANAGEMENT POLICY:
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Provision:
Language:
How to
check?
134(3)(N)
Check the
policy
prepared
by the
Company.
Language:
How to
check?
Rule 8(5)(iii)
Check the
Following:
i. DIR-12
ii. MCA
iii. Comparison
from last
annual return
iv. Register of
Director
Language:
How to check?
Get the
information from
the Management
of the Company.
Language:
How to check?
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Provision:
Language:
How to
check?
Get the
information
from the
Management
of the
Company.
Language:
How to check?
Check the
followings:
i. Subsidiary
ii. Associate
i. Financial
Statement
ii. Whether
company have
subsidiary or not
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