Directors / Board Report - Checklist 2021

Director's / Board Report

As a move towards greater corporate transparency, a Directors / Board report is a financial document that is required to file at end of the financial year by the Companies. It is a financial disclosure made by director to the shareholders of the company in order to maintain transparency in the company to help stakeholders of the company to understand the current financial status of the company and future scope & Growth. Section 134 of the Companies Act, 2013 has laid down provisions related to Financial statement, Board's report, etc.

I. Contents of Board / Director's Report 2021

1. Introduction (Draft below)

To the Members,

Your Directors have pleasure in presenting the ...... Annual Report on the business and operations of .................... Private Limited ("the Company"), together with the audited financial statements for the financial year ended March 31, ..............

2. Financial results - Brief (suggestive)

(Rs in Lacs)

3. State of the Company's Affairs

Suggestive: It is also pertinent to highlight that COVID 19 pandemic has resulted in disruption in regular business operation once again after second wave of COVID 19. However, the Company has adopted measures to ensure business continuity with minimal disruption and the business is expected to return to normal.

4. About COVID-19 (Draft below)

In the last month of FY 2020, the COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lock-downs of all economic activity. For the Company, the focus immediately shifted to ensuring the health and well-being of all employees, and on minimizing disruption to services for all our customers globally. Add more Clauses according to your understanding.

5. About Dividend

Suggestive: The Board of Directors of your Company have not recommended any dividend for the year under review. (if not recommend)

6. Transfer to reserves

Suggestive: There is no amount proposed to be transferred to reserves during the year under review.

7. Company's performance

8. Share Capital details: also mention the increase / decrease during the year under review.

9. Transfer of Unclaimed Dividend/Shares to Investor Education and Protection Fund - if any

10. Details about Subsidiary companies

11. Directors' responsibility statement

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm certain provisions.

Pursuant to the requirement under Section 134(3)(c) of The Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that -

• in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards;
• the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
• the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of The Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
• the Directors have prepared the annual accounts on a going concern basis;
• the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
• the Directors had devised proper systems to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively.

12. Details in respect of frauds reported by Auditors under Section 143(12) of The Companies Act, 2013 other than those which are reportable to the Central Government - Statement (yes or no)

13. Directors and key managerial personnel

14. Company Policies - Directors Appointment, Payment of Remuneration and other matters etc.

15. Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made

16. Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013

17. Maintenance of Cost Records:

Suggestive Clause

During the period under review, Section 148(1) of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company. Hence, the Company has not maintained any cost records and not appointed any Cost Auditor.

18. Number of meetings of the Board of Directors

19. Declaration of Independence by Independent Directors: if any

20. Audit committee details - if any

21. Auditors - Appointment / Re-appointment / Fixing of Remuneration

22. Auditor's report and secretarial audit report

23. Risk management

24. Vigil Mechanism

25. Transactions with related parties - scope of Section 188(1) of the Companies Act, 2013

26. Corporate Social Responsibility

27. Extract of annual return - as per the requirements of Section 92(3) of the Companies Act, 2013 and Rules framed thereunder.

28. Particulars of employees

• The ratio of the remuneration of each director to the median remuneration of the employees of the Company and percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer and Company Secretary in the financial year:
• The percentage increase in the median remuneration of employees in the financial year
• The number of permanent employees on the rolls of Company
• Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
• Affirmation that the remuneration is as per the remuneration policy of the Company:
• The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

29. Deposits from public - Check DPT -3 once

Suggestive Clause

The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013, i.e. within the meaning of Section 2(31) of the Companies Act, 2013 read with Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 and as such there are no such overdue deposits outstanding as on 31st March, 2021.

30. Conservation of energy, technology absorption, foreign exchange earnings and outgo

31. Acknowledgments (draft)

The Directors thank the Company's employees, customers, vendors, investors and academic partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

The Directors appreciate and value the contribution made by every member of the ............. family.

II. Attachments to the Director's / Board Report

• Form No. AOC-2 (Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014)
• Annual Report on CSR Activities
• Form No. MGT-9 - Extract of Annual Return [Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014] - not mandatory
• FORM No. MR-3
• Secretarial Audit Report [Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

III. Signing of Board Report

As per Section 134 (6) of the Companies Act, 2013:

The Board's report and any annexures thereto under sub-section (3) shall be signed by its chairperson of the company if he is authorized by the Board and where he is not so authorized, shall be signed by at least two directors, one of whom shall be a managing director, or by the director where there is one director.

Disclaimer: Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.