Draft Format - Directors Report- One Person Company - Small Company w.e.f. 31.07.2018


Draft Format of ……..
DIRECTOR’ REPORT
ONE PERSON COMPANY & SMALL COMPANY

Short Summary:
MCA has further amended the Companies (Accounts) Rules, 2014, these rules called the Companies (Accounts) Amendment Rules, 2018.

As per Companies amendment Act, 2017 it was notified that MCA shall issue abridge form of Directors Report for One Person Company and Small Company.

MCA has come with new rule 8A on 31st July, 2018 for “abridge form of Directors report disclosure” by prescribing separate bunch of disclosures for Small Company and One Person Company.
This rule came in to effect from 31st July, 2018.

Therefore, we can opine that If a Company (Small / OPC) Holding Board meeting for approval of Directors Report as per Section 134 on or after 31st July, 2018 such Companies have to use the new format of Director’ Report.

Draft Format of Directors Report with Provisions is as follow:


One of the Major Amendments in relation to Directors’ Report is “w.e.f. 31.07.2018 there is no need to prepare the MGT-9 and annex the same with Directors’ Report.
FAQ’S In relation to Section 134 and queries in relation to Directors Report author will share in its next editorial series No. 372
Disclosures to be mentioned in Directors’ Report:
a)     The web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed;

b)     Number of Meeting of Board of Directors

c)     Directors responsibility statement as referred in sub-section 5 of section 134

d)     Details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government.

e)     Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.

f)      The state of the Company’s affairs;

g)     The financial summary and highlights;

h)     Material changes from the date of closure of the financial year in the nature of business and their effect on the financial position of Company.

i)       The details of directors who were appointed or have resigned during the year;

j)        The details or significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operation in future.

With this amendment, the number of matters to be stated in Board's Report of OPC and small companies has been drastically brought down and understandably so.
However, even based disclosures still have to be give by such Companies Board Report Like : CSR, ESOP, A case in point herein is disclosure regarding compliance with applicable SS as per para 9 of Secretarial Standard-1 etc .
DRAFT FORMAT…..
DIRECTORS’ REPORT……
OPC & SMALL Company

Dear Members,

XYZ PRIVATE LIMITED

Your Directors have pleasure in presenting the (No. of AGM) Annual Report together with the Audited Statement of Accounts of your Company for the Year ended March 31, _______.

1.     FINANCIAL SUMMARY
The Company’s financial performance, for the year ended March 31, __________:
                                                                                                                                            (Rs in Lacs)
Particulars
Year ended
31st March ___
Year ended
31st March ____
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


Adjustment relating to Fixed Assets


Transferred to General Reserve


Closing Balance






        2.     STATE OF AFFAIRS / HIGHLIGHTS
1.       The Company is engaged in the business of ___________________________. There has been no change in the business of the Company during the financial year ended 31st March, _________.
2.       There has been no change in the business of the Company during the financial year ended 31st March, ___________.

            3.                  CHANGE IN DIRECTORSHIP

There has been no change in the constitution of Board during the year under review i.e. the structure of the Board remains the same.
OR
If there is any change, mentioned that Mr. …… has been resigned/ appointed w.e.f. ____________ as Director / MD/ etc of Company.

              4.                  BOARD’S COMMENT ON THE AUDITORS’ REPORT

The observations of the Statutory Auditors, when read together with the relevant notes to the accounts and accounting policies are self explanatory and do not call for any further comment.
OR
(Explanation or comment by the Board on every qualification, reservation, adverse remark or disclaimer made by the statutory auditor in his report and/or by the secretarial auditor in the secretarial Audit Report)

               5.                  MEETINGS OF BOARD OF DIRECTORS

(No. of Board Meeting) ___________Board Meetings were held during the Financial Year ended March 31, __________ i.e. (Dates of Board Meetings).
6.                  
                6.                  WEB LINK OF ANNUAL RETURN, IF ANY.

The Company is having website i.e.___________________________ and annual return of Company has been published on such website. Link of the same is given below:
OR
The Company doesn’t having any website.

               7.                     MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates and the date of this report
OR
The following material changes and commitment occurred during the year under review affecting the financial position of the Company.

              8.                  DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company’s operations in future.
OR
The details of a significant material order passed by the Hon’ble High Court which may impact the going concern status of the Company and its future operations is provided in Annexure ___and forms part of this report

              9.              DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

a)    In the preparation of the annual accounts for the year ended March 31, __________, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.

b)    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 as at March 31,__________ and of the profit of the Company for the year ended on that date.

c)     The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d)    The Directors have prepared the annual accounts on a 'going concern' basis.

e)    The Company being unlisted, sub clause (e) of section 134(3) of the Companies Act, 2013 pertaining to laying down internal financial controls is not applicable to the Company.

f)      The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such system are adequate and operating effectively.

SIGNING OF BOARD REPORT:
134(6) The Board’s report and any annexures thereto under sub-section (3) shall be signed by its chairperson of the company if he is authorised by the Board and where he is not so authorised, 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.

If anyone wants Word copy of such Draft Directors’ Report can Ping “MAIL ID on my Whatsapp No. i.e. 8130757966” by mentioning following:
Name and email ID

(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com). Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION


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