WHAT IS DIRECTOR’S
REPORT ?
“The Directors'
Report is a
document produced by the board of directors under the requirements of the legal law,
which details the state of the company and its compliance with a set of
financial, accounting and corporate social responsibility standards. The Directors' Report arose out of a general move for greater
transparency in corporate governance. It is useful for shareholders to find out
issues such as whether the company has good finances, whether the market has
potential, and whether the business has the structural capacity to expand into
new opportunities. So Directors
Report remains unique because it is a direct communication from the
directors to the shareholders. A director’s report will give the information on
all the directors of a specific company. This information can be used to judge
the direction that a company may take in the future in relation to the other
companies that the directors hold directorships at.”
Inference Drawn: -
On the Basis of above Financial results of
the All the three Companies, it is clear that Profit after Tax (PAT) of Mar-12
has increased in comparison to last 2 years
of only two companies named Tata Steel Ltd from Steel Sector and NTPC
Ltd from Power Sector, but there is huge decline in PAT of Maruti Suzuki India
Ltd from Auto Sector in comparison to last 2 years performance.
Inference Drawn: -
On the Basis of above Dividend Information,
it is clear that Tata Steel Ltd. from Steel Sector is the only company which
director’s Recommended dividend in Mar-11 & Mar-12 is highest in comparison
to other two companies director’s Recommended Dividend in Mar-11 & Mar-12
but the Total Amount paid for Dividend is the highest of NTPC Ltd. from Power
Sector in all the three years in comparisons to other two companies Total
Amount Dividend Paid in all the three years named Maruti Suzuki India Ltd. from
Auto Sector and Tata Steel Ltd. from Steel Sector.
Inference Drawn: -
After analyzing the above table regarding the
Rating of Financial Instruments, It is clearly shown that Tata Steel Ltd. from
Steel Sector is the only company which has not issued any financial instrument
(Debt Instrument) Company does not have requirement of Debt from the market
that’s why Debt Instrument has not been issued. But remain two companies named Maruti
Suzuki India Ltd. from Auto Sector and NTPC Ltd. from Power Sector have issued
their financial instruments (Debt instruments) in the market and this financial
instruments have rated by CRISIL which is showing the debt sovereignty of the
company.
Inference Drawn: -
Above table is clearly showing that all the
three companies have got award which shows that environment of the company.
Tata Steel Ltd. from Steel Sector is the only the company which is having greater
number of awards in comparisons to others two companies, but NTPC Ltd. from
Power Sector is only the Company which is having less number of awards but all
the awards have awarded from Government of India.
Inference Drawn: -
It is clear showing that Tata Steel Ltd. from
Steel Sector is the only the Company which is having greater number of
subsidiaries in all the 3 years in comparisons to two other companies.
Inference Drawn: -
On the basis of No. of Employees Tata Steel
Ltd. from Steel Sector is only the company which is having greater number of
Human Resources in all the three
years in comparison to two other
companies and NTPC Ltd. from Power Sector is second one.
Inference Drawn: -
The above table shows the position of
Independent Director, Non – Independent Director, Executive Director, & Non
– Executive Director in all the three companies. Executive director is that person of a company, who
is assigned with the overall charge and operation of some department of the
company. While on the other hand, a non-executive Director has no part to play
in the operational field of the company. However, he enjoys the same position
in the Board in the decision making process, as the executive directors have.
His role is limited to participation in the Board level meetings only for which
he is paid a per meeting fee, while the executive director executes his
assigned functions on day to day basis as a salaried employee of the company
for which he gets monthly salary and other benefits, as fixed by the Board.
A non-executive director (NED)
typically does not engage in the day-to-day management of the organization, but
is involved in policy making and planning exercises. In addition, non-executive
directors' responsibilities include the monitoring of the executive directors,
and to act in the interest of any stakeholders. Non-executive directors are the custodians of the governance
process. They are not involved in the day-to-day running of business but
monitor the executive activity and contribute to the development of strategy.
Independent directors are directors who apart from receiving director’s remuneration do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in the judgement of the board may affect their independence of judgement.
Independent directors are directors who apart from receiving director’s remuneration do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in the judgement of the board may affect their independence of judgement.
So, after understanding the meaning of all type of directors, it can be
clearly understand how positions of directors are important in the company.
Inference Drawn: -
All the three companies have disclosed the
Accounting Standard which they have followed.
Inference Drawn: -
NTPC Ltd. from Power Sector is having total
six Auditors in all three years while other two companies are having only one
Auditor in all three years.
Inference Drawn: -
After analyzing the Research and Development
from the above table, it is clear that Maruti Suzuki India Ltd. from Auto
Sector is the only company which expenditure on Research Development is greater
in comparison to other two companies.
Inference Drawn: -
After analyzing the Foreign Exchange of all
the companies, it is clear that Tata Steel Ltd. is the only company from Steel
Sector which has positive Net Foreign Exchange Surplus in comparison to other
two companies.
Conclusion: - “After seeing all the
content of Director’s Report of all the companies, it is clear that Director’s
Report is the only Report which shows the company real picture in true sense.
And it is the report which is the direct communication to the shareholders in reality.”
