The Companies Act,
2013 has brought various changes with its enactment. One of the major change is
the drafting of the Board Report which was earlier known as Directors’ report
as per the Companies Act, 1956. Section 134 of the companies act, 2013 governs
the Board Report which states the major points to be covered under the Board
Report. The Board Report shall be signed on behalf of the board by the
Chairperson of the company where he is authorized by the Board or by two directors out of whom one shall be
Managing Director and the CEO if he is a director of the company, the CFO and
Company Secretary, wherever they are appointed.
A draft format of
the Board’s/ Director’s Report for a private company is hereunder:
Board’s Report
To,
The Members of
________________
PRIVATE LIMITED
Your Directors have pleasure in presenting this ___th
Annual Report of your Company together with the Audited Statement of Accounts
and the Auditors’ Report of your company for the financial year ended,
31st March, 20xx.
FINANCIAL
HIGHLIGHTS
This
part is covered under Clause(i) of sub section (3) of Section 134 which states
the company’s affairs/financial results of the year in the following manner:
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Particulars
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Current year
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Previous Year
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Revenue from Operations
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Other Income
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Total Income
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Depreciation
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Tax
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Current Tax
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Deferred Tax
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Profit/(Loss) after
Tax
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Earnings per share (in Rupees) :
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Basic
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Diluted
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STATE OF
COMPANY’S AFFAIRS
During the year under review, the total Income
of the Company was Rs __________ against Rs ____________ in the
previous year which shows the increase in revenue by ______%. During the
period, The Company has earned a Profit after tax of Rs ____________ compared to Rs ________________ in the
previous year which shows the increase by ___________%.
TRANSFER
TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT, 2013
Disclose the details about the amount
transferred to General Reserve or any reserve:
For the financial year
ended 31st March, 20xx, the Company is
proposed to carry an amount of Rs __________/- to General Reserve
Account.
Or
For the financial year ended 31st March,
20xx, the Company had not transfer any sum to Reserve Account. Therefore, your
Company remained the balance of profit to Profit and Loss Accounts of the
Company to Surplus Account.
DIVIDEND
As per Clause (k) of 134(3), where it is
proposed to pay dividend, the Director’s report shall contain the
recommendations of the Board as to the rate of dividend for the year for the
approval of the members in the AGM.
Your Directors do not
recommend any dividend for the year ended 31st March, 20xx.
Or
The Board in its meeting held on ______,
declared an interim dividend of Rs. _____/- per equity share. Further the
Board, in its meeting held on __________ has recommended a final dividend of
Rs. ____/- per equity share for the financial year ended 31st March, 20xx. The
proposal is subject to the approval of the shareholders at the AGM to be held
on ____________.
The total dividend appropriation (excluding
dividend tax) for the current year is Rs. _____________ (including the proposed
dividend amount).
Your Directors are pleased to recommend a
dividend of Rs. ___ per share for the current financial year. The dividend if
approved and declared in the forthcoming Annual General meeting would result a
Dividend outflow of Rs. _________ and dividend Distribution Tax (______%) of
Rs. __________ aggregating a total outflow of Rs. __________.
MATERIAL
CHANGES AND COMMITMENTS
Clause(l) of section 134(3) states that the
Board’s Report shall deal with the material changes and commitments, if any,
affecting the financial position of the company which have occurred between the
end of the financial year of the company to which the financial statement
relates and the date of Board Report.
There are no Material Changes and Commitments
impacting the going concern status and Company’s operations in future.
Or describe the material changes occurred in the
company.
FIXED
DEPOSITS
The company has not accepted deposits from
public within the meaning of Section 73 of the Companies Act, 2013.
Or
The details of deposits
accepted/renewed during the year under review are furnished hereunder:
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Sl. No
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Particulars
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Amount in Rs.
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a)
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Amount accepted during
the year
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b)
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Amount remained unpaid
or unclaimed as at the end of the year
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c)
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whether there has been
any default in repayment of deposits or payment of interest thereon during
the year and if so, number of such cases and the total amount involved
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i) at the beginning of
the year
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i) maximum during the
year
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h
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iii) at the end of the
year
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ANNUAL
RETURN
As per Clause (a) of Section 134(3) an extract
of the annual return has to be annexed to the Board report in Form MGT-9
The Extract of Annual Return as required under
section 92(3) of the Companies Act, 2013 in Form MGT-9 is annexed herewith for
your kind perusal and information. (Annexure: 1)
MEETINGS
OF THE BOARD OF DIRECTORS
As per Clause (b) of Section 134(3) the Board
report shall indicate the number of Board Meetings held during the financial
year under review.
The following Meetings of the Board of Directors
were held during the Financial Year 20xx-xx:
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SN
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Date
of Meeting
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Board
Strength
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No. of
Directors Present
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1.
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2.
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3.
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4.
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PRESENCE/ATTENDANCE
OF DIRECTORS IN THE MEETINGS
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S.N.
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Name of Director
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Board Meeting
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Committee Meeting
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AGM
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No of Meeting held
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No of Meeting attended
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%
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No of Meeting held
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No of Meeting attended
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%
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1
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2
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DIRECTORS’
RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act,
2013 the Board of Directors of the Company confirms that-
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(a)
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In the preparation of the annual accounts, the
applicable accounting standards had been followed along with proper
explanation relating to material departures;
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(b)
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The directors had 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 and
loss of the company for that period;
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(c)
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The directors had taken proper and sufficient
care for the maintenance of adequate accounting records in accordance with
the provisions of this Act for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
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(d)
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The directors had prepared the annual accounts
on a going concern basis; and
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(e)
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Company being a unlisted company, the said
para is not applicable.
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(f)
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The directors had devised proper systems to
ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
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APPOINTMENT
OF INDEPENDENT DIRECTORS IN THE BOARD AND DECLARATION UNDER SECTION 149(6)
As per Clause (b) of Section 134(3) the Board
report shall disclose the declaration about the independent director.
The provisions of Section 149 pertaining to the
appointment of Independent Directors do not apply to our Company.
Or
The Board of Directors of
the Company hereby confirms that all the Independent directors duly appointed
by the Company have given the declaration and they meets the criteria of
independence as provided under section 149(6) and (7) of the Companies Act, 2013.
NOMINATION AND REMUNERATION COMMITTEE
The Company’s Nomination
and Remuneration Committee comprises of three Non-executive Directors. The
table sets out the composition of the Committee:
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Name of the Director
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Position held in the Committee
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Category of the Director
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Chairman
/ Member
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Non
Executive Independent Director / Non Executive Non Independent Director
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Chairman
/ Member
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Non
Executive Independent Director / Non Executive Non Independent Director
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Chairman
/ Member
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Non
Executive Independent Director / Non Executive Non Independent Director
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Terms of Reference
The Terms of Reference of
the Nomination and Remuneration Committee are as under:
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1.
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To identify persons who
are qualified to become Directors and who may be appointed in senior
management in accordance with the criteria laid down, recommend to the Board
their appointment and removal and shall carry out evaluation of every
Director’s performance.
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2.
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To formulate the
criteria for determining qualifications, positive attributes and independence
of a Director and recommend to the Board a policy, relating to the
remuneration for the Directors, Key Managerial Personnel and other employees.
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3.
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The Nomination and
Remuneration Committee shall, while formulating the policy ensure that:
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a
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the level and
composition of remuneration is reasonable and sufficient to attract, retain
and motivate Directors of the quality required to run the Company
successfully;
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b
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relationship of
remuneration to performance is clear and meets appropriate performance
benchmarks; and
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c
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remuneration to
Directors, Key Managerial Personnel and senior management involves a balance
between fixed and incentive pay reflecting short and long-term performance
objectives appropriate to the working of the company and its goals:
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4.
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Regularly review the
Human Resource function of the Company
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5.
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Discharge such other
function(s) or exercise such power(s) as may be delegated to the Committee by
the Board from time to time.
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6.
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Make reports to the
Board as appropriate.
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7.
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Review and reassess the
adequacy of this charter periodically and recommend any proposed changes to
the Board for approval from time to time.
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8.
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Any other work and
policy, related and incidental to the objectives of the committee as per
provisions of the Act and rules made there under.
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REMUNERATION POLICY
Remuneration to Executive
Directors:
The remuneration paid to
Executive Directors is recommended by the Nomination and Remuneration Committee
and approved by Board in Board meeting, subject to the subsequent approval of
the shareholders at the General Meeting and such other authorities, as may be
required. The remuneration is decided after considering various factors such as
qualification, experience, performance, responsibilities shouldered, industry
standards as well as financial position of the Company.
Remuneration to
Non-Executive Directors:
The Non-Executive
Directors are paid remuneration by way of Sitting Fees and Commission. The
Non-Executive Directors are paid sitting fees for each meeting of the Board and
Committee of Directors attended by them.
AUDITORS:
STATUTORY
AUDITORS & THEIR REPORT
As per Clause (f) of Section 134(3), the Board
report shall contain the comments on the statutory audit report and annex the
same with the report
At the Annual General Meeting held on
__________, M/s. __________________., Chartered Accountants (FRN No.
________________) was appointed as statutory auditors of the company to hold
office till the conclusion of the Annual General Meeting to be held in the
calendar year ______. In terms of the first proviso to Section 139 of the
Companies Act, 2013, the appointment of the auditors shall be placed for
ratification at every Annual General Meeting. Accordingly, the appointment of
M/s. __________________., Chartered Accountants, as statutory auditor of the
company, is placed for ratification by the shareholders.
Company has received certificate from the
Auditors to the effect they are not disqualified to continue as statutory
auditors under the provisions of applicable laws.
There are no observations (including any
qualification, reservation, adverse remark or disclaimer) of the Auditors in
their Audit Report that may call for any explanation from the Directors.
Further, the notes to accounts referred to in the Auditor`s Report are
self-explanatory.
SECRETARIAL
AUDITORS
As per Clause (f) of Section 134(3), the Board
report shall contain the comments on the secretarial audit report and annex the
same with the report.
The Secretarial Audit is not applicable on the
company as it is not covered under the provisions of Section 204 of the
Companies Act, 2013 and The Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
Or
The Board has appointed
__________________, Practicing Company Secretary, to conduct Secretarial Audit
for the financial year __________. The Secretarial Audit Report for the
financial year ended March 31, _______ is annexed herewith marked as Annexure:
__ to this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
COST
AUDITOR
Pursuant to Section 148 of the Companies Act,
2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the
cost audit records maintenance is not applicable on the company.
Or
The Board has appointed
__________________, Chartered Accountant, to conduct Cost Audit for the
financial year __________. The Cost Audit Report for the financial year ended
March 31, _______ is annexed herewith marked as Annexure: __ to this Report.
The Cost Audit Report does not contain any qualification, reservation or
adverse remark.
LOANS,
GUARANTEES AND INVESTMENTS
As per Clause (g) of Section 134(3), the Board
report shall contain the particulars of loan and guarantees given and
investment made in terms of section 186 of the Act during the year.
The Company has not made/given/advanced any
Loan, Guarantee and Investment during the financial year covered under section
186 of the Companies Act, 2013.
Or
The Company has following
Loans, Guarantee given and Investments made under section 186 of the Companies
Act, 2013 for the financial year ended 31st March 2016:
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SN
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Particular/Purpose/Nature
of Transaction
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Amount of Transaction
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RELATED
PARTY TRANSACTIONS
As per clause (h) of Section 134(3) of the
Companies Act, 2013 the Board’s report shall include details of the contracts
or arrangements entered by the company with a related party during the years in
Form AOC-2
All contracts / arrangements / transactions
entered by the Company during the financial year with related parties were in
the ordinary course of business and on an arm’s length basis. During the year,
the Company had not entered into any contract / arrangement / transaction with
related parties which could be considered material in accordance with the
policy of the Company on materiality of related party transactions.
Further
all the necessary details of transaction entered with the related parties as
defined under Section 188 of the Companies Act, as defined under Section 2 (76)
of the said Act are attached herewith in form no. AOC-2 for your kind perusal
and information. (Annexure: __).
Or
There
have been no materially significant related party transactions between the
Company and the Directors, the management, the subsidiaries or the relatives
except for those disclosed in the financial statements.
Accordingly,
particulars of contracts or arrangements with related parties referred to in
Section 188(1) along with the justification for entering into such contract or
arrangement in Form AOC-2 does not form part of the report.
ENERGY
CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
Information on conservation of Energy, Technology
absorption, Foreign Exchange earnings and outgo required to be disclosed under
Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules,
2014 are provided hereunder
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PARTICULARS
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REMARKS
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A)
CONSERVATION
OF ENERGY:
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·
the steps taken or impact on conservation of
energy;
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The
Corporation is taking due care for using electricity in the office and its
branches. The Corporation usually takes care for optimum utilization of
energy. No capital investment on energy conservation equipment made during
the financial year.
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·
the steps taken by the company for utilizing
alternate sources of energy;
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the capital investment on energy conservation
equipments;
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B)
TECHNOLOGY
ABSORPTION:
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·
the efforts made towards technology absorption;
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NOT
APPLICABE
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the benefits derived like product improvement,
cost reduction, product development or import substitution;
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NOT
APPLICABLE
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·
in case of imported technology (imported during
the last three years reckoned from the beginning of the financial year)-
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(a) the
details of technology imported;
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(b) the year of import;
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(c) whether the technology been fully absorbed;
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(d) if not fully absorbed, areas where absorption
has not taken place, and the reasons thereof; Not applicable since 5 years
period is over
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NOT
APPLICABLE
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·
the expenditure incurred on Research and
Development
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NOT
APPLICABLE
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C)
FOREIGN EXCHANGE EARNINGS AND
OUTGO:
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·
The Foreign Exchange earned in terms of actual
inflows during the year and the Foreign Exchange outgo during the year in
terms of actual outflows
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NOT
APPLICABLE
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RISK
MANAGEMENT
As per Clause (n) of subsection (3) of Section
134, a statement indicating the development and implementation of risk
management policy of the company with suitable comments on this matter should
be mentioned.
Risks are events, situations or circumstances
which may lead to negative consequences on the Company's businesses. Risk
management is a structured approach to manage uncertainty. A formal enterprise
wide approach to Risk Management is being adopted by the Company and key risks
will now be managed within a unitary framework. As a formal roll-out, all
business divisions and corporate functions will embrace Risk Management Policy
and Guidelines, and make use of these in their decision making. Key business
risks and their mitigation are considered in the annual/strategic business
plans and in periodic management reviews. The risk management process in our
multi-business, multi-site operations, over the period of time will become
embedded into the Company’s business systems and processes, such that our
responses to risks remain current and dynamic.
CORPORATE SOCIAL RESPONSIBILITIES (CSR)
As per Clause (o) of
sub-section (3) of Section 134 of the Companies Act, 2013 the details about the
policy developed and implemented by the company on CSR initiatives taken by the
company. The company has to specify the
reason for not spending on CSR, if any.
The company does not meet the criteria of
Section 135 of Companies Act, 2013 read with the Companies (Corporate Social
Responsibility Policy) Rules, 2014 so there is no requirement to constitution
of Corporate Social Responsibility Committee.
Or
As required under
Section 135 of the Companies Act, 2013, the Board of Directors has constituted
a Corporate Social Responsibility (CSR) Committee to formulate and recommend to
the Board, a Corporate Social Responsibility (CSR) Policy which shall indicate the
activities to be undertaken by the Company as specified in Schedule VII of the
Companies Act, 2013, to recommend the amount of expenditure to be incurred on
the activities and to monitor the Corporate Social Responsibility Policy of the
Company from time to time.
PERSONNEL
Your Company has not employed any individual
whose remuneration falls within the purview of the limits prescribed by the
provisions Section 197(12) of the Act read with Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014. Rule 5(1)
of the said rules is not applicable to the Company.
INFORMATION
ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY
Company does not have any Subsidiary, Joint
venture or Associate Company.
Or
We
have ___ subsidiaries, ___ joint ventures and __ associate companies as on 31
March, 20xx. During the year, the Board of Directors (the Board) reviewed the
affairs of material subsidiaries. We have, in accordance with Section 129(3) of
the Companies Act, 2013 prepared consolidated financial statements of the
Company and all its subsidiaries, which form part of the Annual Report.
Further, the report on the performance and financial position of each of the
subsidiary, associate and joint venture and salient features of the financial
statements in the prescribed Form AOC-1 is annexed to this report [Annexure __].
The
names of companies that have become or ceased to be subsidiaries, joint
ventures and associates are disclosed in the annexure to this report [Annexure ___].
INTERNAL
FINANCIAL CONTROLS
The Companies Act, 2013 re-emphasizes the need
for an effective Internal Financial Control system in the Company. The system
should be designed and operated effectively. Rule 8(5) (viii) of Companies
(Accounts) Rules, 2014 requires the information regarding adequacy of Internal
Financial Controls with reference to the financial statements to be disclosed
in the Board`s report. To ensure effective Internal Financial Controls the
Company has laid down the following measures:
·
The
internal financial control systems are commensurate with the size and nature of
its operations.
·
All
legal and statutory compliances are ensured on a monthly basis. Non-compliance,
if any, is seriously taken by the management and corrective actions are taken
immediately. Any amendment is regularly updated by internal as well as external
agencies in the system.
·
Approval
of all transactions is ensured through a preapproved Delegation of Authority
Schedule which is reviewed periodically by the management.
·
The
Company follows a robust internal audit process. Transaction audits are
conducted regularly to ensure accuracy of financial reporting, safeguard and
protection of all the assets. Fixed Asset verification of assets is done on an
annual basis. The audit reports for the
above audits are compiled and submitted to Board of Directors for review and
necessary action.
COMPANY’S
POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION
The provisions of Section 178(1) relating to
constitution of Nomination and Remuneration Committee are not applicable to the
Company and hence the Company has not devised any policy relating to
appointment of Directors, payment of Managerial remuneration, Directors
qualifications, positive attributes, independence of Directors and other
related matters as provided under Section 178(3) of the Companies Act, 2013.
Or
The Company's Policy relating to appointment of
Directors, payment of Managerial remuneration, Directors' qualifications,
positive attributes, independence of Directors and other related matters as
provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure __ and attached to this
report.
COMPOSITION OF AUDIT
COMMITTEE:
The provision of section 177 relating to
Audit committee is not applicable on the company.
Or
The Audit Committee
consists of the following members:
a.
b.
c.
The above composition of
the Audit Committee consists of independent Directors viz., Mr. _________ and
Mr. _________ who form the majority.
The Company has established
a vigil mechanism and overseas through the committee, the genuine concerns
expressed by the employees and other Directors. The Company has also provided
adequate safeguards against victimization of employees and Directors who
express their concerns. The Company has also provided direct access to the
chairman of the Audit Committee on reporting issues concerning the interests of
co employees and the Company.
VIGIL MECHANISM /
WHISTLE BLOWER POLICY
The Company is not required to form such
policy.
Or
The Company has
established a Vigil Mechanism / Whistle Blower Policy to deal with instances of
fraud and mismanagement, if any. The Policy has a systematic mechanism for
directors and employees to report concerns about unethical behavior, actual or
suspected fraud or violation of the Company’s Code of Conduct or policy.
BOARD
EVALUATION
The provision of section 134(3)(p) relating to
board evaluation is not applicable on the company.
Or
The Board evaluated the effectiveness of its
functioning and that of the Committees and of individual directors by seeking
their inputs on various aspects of Board/Committee Governance.
The aspects covered in the evaluation included
the contribution to and monitoring of corporate governance practices,
participation in the long-term strategic planning and the fulfilment of
Directors' obligations and fiduciary responsibilities, including but not
limited to, active participation at the Board and Committee meetings. The
Chairman of the Board had one-on-one meetings with the Independent Directors
and the Chairman of the Nomination and Remuneration Committee had one-on-one
meetings with the Executive and Non-Executive Directors. These meetings were
intended to obtain Directors’ inputs on effectiveness of Board/Committee
processes. The Board considered and discussed the inputs received from the
Directors. Further, the Independent Directors at their meeting, reviewed the
performance of Board, Chairman of the Board and of Non-Executive Directors.
GENERAL
Your Directors state that no disclosure or
reporting is required in respect of the following items as there were no
transactions on these items during the year under review was occurred and the
further provisions of relevant Sections of the Act are not applicable on the
Company.
·
Issue of
equity shares with differential rights as to dividend, voting or otherwise.
·
Issue of
shares (including sweat equity shares) to employees of the Company under any
scheme.
·
No
significant or material orders were passed by the Regulators or Courts or Tribunals
which impact the going concern status and Company’s operations in future.
Your Directors further state that during the
year under review, there were no cases filed pursuant to the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors wish to express their grateful
appreciation to the continued co-operation received from the Banks, Government
Authorities, Customers, Vendors and Shareholders during the year under review.
Your Directors also wish to place on record their deep sense of appreciation
for the committed service of the Executives, staff and Workers of the Company.
FOR ____________________________
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Name
of Director:
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Name
of Director:
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Designation:
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Designation:
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DIN:
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DIN:
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DATED:
PLACE:
Contact us:
Name of Company
Address
CIN:
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