Disclosures to be made in Director’s Report – Companies Act, 2013

ENHANCED DISCLOSURE AND INFORMATION IN DIRECTOR’S REPORT

Provisions which continue to be included in Director’s Report as per Companies Act, 1956 are:

- State of companies affairs

- Percentage of proposed dividend (if any)

- Amount proposed to be carried to the reserves (if any)

- Material changes and commitments, affecting the financial position of the co. (if any)

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

- Significant changes in the business or businesses in which co. or its subsidiaries have interest.

- Director’s Responsibility Statement confirming that:

  • Preparation of annual accounts with applicable accounting standards
  • Consistency in adoption of accounting policy to reflect true and fair view of financial statements.
  • Maintenance of adequate accounting records for safeguarding the assets of the company.

Some Additional provisions which are to be included in Director’s Report as per Companies Act, 2013 are:

 

- For every Co. it is mandatory to enclose the extract of Annual Return (in MGT-9) with Director Report.

- Under Companies Act, 2013 it is mandatory for the companies to put information of about the no. of board meetings held during the year.

- A statement on declaration given by independent director under sub section 6 of section 149.

- Now as per section 178, listed co. and such class of co. as may be prescribed shall disclose regarding the Nomination, Remuneration stakeholder relationship committee in the board report.

- Such companies are also required to disclose its policy relating to remuneration for the director’s, KMP and other employees.

- A Director report is also contained any reservation and qualification as marked by the statutory auditors and company secretary in practice in its  auditors report and secretarial report respectively.

- Details of loan, guarantee and investment shall be mentioned in director’s report as per the provisions of sec 186.

- As per sec. 186 co. shall disclose in its board report the detailed information regarding the related party transactions.

- The director’s report shall contain the policy, development and implementation of CSR project.

- As per sec. 149 Co. shall disclose in its board report information about the appointment/re-appointment of independent director.

- As per sec 197 every listed co. shall disclose in its board report the ratio of remuneration of each director.

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