Latest Amendment in Director’s Report

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CS Divesh Goyal
CS Divesh Goyal
CS Divesh Goyal is a Fellow member of ICSI, Practicing Company Secretary, and Steering Voice in the Corporate World. He is a Prop. at Goyal Divesh & Associates, Company Secretaries. He is a competent professional having enrich 6 years post qualification experience as Company Secretary with expertise in Corporate Law, FEMA, IBC, SEBI, RBI. He has written more than 600 editorials on Companies Act, 2013 to keep at pace with the latest changes and critically analyse the implications of various provisions of the Companies Act, 2013, Insolvency & Bankruptcy Code, 2016, FEMA, RBI, SEBI etc. He is a vibrant, sought after, and spellbinding speaker and has delivered more than 200 sessions on various aspects of Company Law at ICSI, ICAI, and online platforms. Apart from his passion for his work he also believes in elevating his profession and for that dream

The Ministry of Corporate Affairs, Government of India, issued notifications dated 24th March 2021 to amend Companies (Accounts) Rules, 2014 to enhance the disclosures required to be made by the Company in Board Report;

Purpose of Amendment:

By these amendments, MCA increasing stringency in compliances and adding numerous additional disclosures in Financial Statement, Directors Report, and Audit Report. The main purpose behind these amendments is more transparency.

Ministry has issues Notifications:

S. No. Date of Notification Particular Purpose (Amendment in)
24.03.2021 [1]Companies (Account) Amendment Rules, 2021 Directors Report


Above mentioned amendments shall come into force w.e.f. 01st day of April 2021.

Que: Financial year-end on 31st March 2021. Directors Report signed on 25th August 2021. Whether Company has to give the effect of amendment in the Director’s Report?

Ans: Above mentioned amendment shall be applicable to Companies for the financial year starting on or after 01st April 2021. Therefore, this amendment shall affect the financial statement as of 31st March 2022 i.e. (f.y. 2021-22).

Therefore, one can opine that Directors Report for the financial year ending 31.03.2021 shall be the same as per earlier disclosures.

Amendment in Rule 8 i.e. Matters to be included in Board’s Report. In rule 8, sub-rule 5 after clause x, two new clauses added.

New Clauses:

(xi) the details of an application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year.

(xii) the details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the Banks or Financial Institutions along with the reasons thereof.

Disclosure on above mentioned two clauses are required to give in the Director’s Report of Companies along with other disclosures.

Ques:2 Whether the above-mentioned amendment in Directors Report required to be covered in Directors Report prepared for f.y. ended 31.03.2021?

Ques:3 Whether this amendment applicable to the Director’s Report of every company or exemptions are given to some classes of companies?


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