For each financial year the directors of a company must prepare a Directors’ Report. It should deal with five topics:
1. General matters
2. A business review
3. Information on the acquisition or disposal of own shares
4. Information on interests in shares or debentures
5. Statement on relevant audit information
The obligation to do this can be found in Section 325.
Unless the company is entitled to an exemption – and avails of it – the directors must arrange for statutory auditors to carry out an audit on the statutory financial statements. This obligation can be found here (Section 333).
A minority of members may not want the directors to avail of the audit exemption. If so, Section 334 is relevant. As long as the minority can muster 1/10th of the total voting rights, it may serve a notice in writing on the company, stating that they (or he or she) do not want the audit exemption to be availed of.
If a company has availed of the audit exemption, Section 335 says that the balance sheet for that year must carry a statement to that effect.
What is the correct form and content of the statutory auditors’ Report on the Statutory Financial Statements? It is set out at Section 336.
Practitioners will recognise in this section the old Section 193 of the CA 1990.
How is the Report to be signed and dated? That is explained in Section 337, and practitioners will recognise here the old Section 193(4G) 1990. If the Auditor’s Report is – for example – laid before the members without having been signed, any officers of the company responsible will be guilty of a Category 3 Offence.