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COMPANIES ACT 1981 No. 89 of 1981 - SECT 270
Directors' reports
270. (1) The directors of a company, other than a company to which sub-section
(2) applies, shall, not less than 14 days before the annual general meeting of
the company or, if no annual general meeting of the company is held within the
period within which it is required by section 240 to be held, not less than 14
days before the end of that period, cause to be made out in respect of the
last financial year of the company a report, made in accordance with a
resolution of the directors and signed by not less than 2 of the directors
with respect to the profit or loss of the company for that financial year and
the state of the company's affairs as at the end of that financial year,
stating-
(a) the names of the directors in office at the date of the report;
(b) the principal activities of the company in the course of the financial
year and any significant change in the nature of those activities
during that period;
(c) the net amount of the profit or loss of the company for the financial
year after provision for income tax;
(d) where, at any time during the financial year, the company was a
holding company-the names of any subsidiaries acquired or disposed of
during the financial year, the consideration for each such acquisition
or disposal and the amount in each case of the net tangible assets of
the subsidiary acquired or disposed of and, in the case of a
subsidiary not being a wholly-owned subsidiary, the extent of the
company's interest in the subsidiary;
(e) the amounts and particulars of any material transfers to or from
reserves or provisions during the financial year;
(f) where, during the financial year, the company has issued any shares or
debentures-the purposes of the issue, the classes of shares or
debentures issued, the number of shares of each class and the amount,
term and rate of debentures of each class, and the terms of issue of
each class of the shares;
(g) the amount (if any) that the directors recommend should be paid by way
of dividend, and any amounts that have been paid or declared by way of
dividend since the end of the previous financial year, indicating
which of those amounts (if any) have been shown in a previous report
under this sub-section or sub-section (2) or under a corresponding
previous law of the Territory;
(h) whether the directors, before the profit and loss account and
balance-sheet were made out, took reasonable steps to ascertain what
action had been taken in relation to the writing off of bad debts and
the making of provisions for doubtful debts, and to cause all known
bad debts to be written off and adequate provision to be made for
doubtful debts;
(j) whether, at the date of the report, the directors are aware of any
circumstances that would render the amount written off for bad debts
or the amount of the provision for doubtful debts inadequate to any
substantial extent and, if so, giving particulars of the
circumstances;
(k) whether the directors, before the profit and loss account and
balance-sheet were made out, took reasonable steps to ascertain
whether any current assets, other than current assets to which
paragraph (h) applies, were unlikely to realize in the ordinary course
of business their value as shown in the accounting records of the
company and, if so, to cause-
(i) those assets to be written down to an amount that they might be
expected so to realize; or
(ii) adequate provision to be made for the difference between the
amount of the value as so shown and the amount that they might
be expected so to realize;
(l) whether, at the date of the report, the directors are aware of any
circumstances that would render the values attributed to current
assets in the accounts misleading and, if so, giving particulars of
the circumstances;
(m) whether there exists at the date of the report-
(i) any charge on the assets of the company that has arisen since
the end of the financial year and secures the liabilities of
any other person and, if so, giving particulars of the charge
and, so far as practicable, of the amount secured; and
(ii) any contingent liability that has arisen since the end of the
financial year and, if so, stating the general nature of the
liability and, so far as practicable, the maximum amount, or an
estimate of the maximum amount, for which the company could
become liable in respect of the liability;
(n) whether any contingent or other liability has become enforceable, or
is likely to become enforceable, within the period of 12 months after
the end of the financial year, being a liability that, in the opinion
of the directors, will or may substantially affect the ability of the
company to meet its obligations when they fall due and, if so, giving
particulars of that liability;
(o) whether at the date of the report the directors are aware of any
circumstances not otherwise dealt with in the report or accounts that
would render any amount stated in the accounts misleading and, if so,
giving particulars of the circumstances;
(p) whether the results of the company's operations during the financial
year were, in the opinion of the directors, substantially affected by
any item, transaction or event of a material and unusual nature and,
if so, giving particulars of that item, transaction or event and the
amount or the effect of that item, transaction or event, if known or
reasonably ascertainable; and
(q) whether there has arisen in the interval between the end of the
financial year and the date of the report any item, transaction or
event of a material and unusual nature likely, in the opinion of the
directors, to affect substantially the results of the company's
operations for the next succeeding financial year and, if so, giving
particulars of the item, transaction or event.
(2) The directors of a company that, at the end of its last financial year,
was a holding company (other than a holding company that was a wholly-owned
subsidiary of another corporation incorporated in the Territory or in a
participating State or participating Territory) shall, not less than 14 days
before the annual general meeting of the company or, if no annual general
meeting of the company is held within the period within which it is required
by section 240 to be held, not less than 14 days before the end of that
period, cause to be made out a report, made in accordance with a resolution of
the directors, and signed by not less than 2 of them, with respect to the
profit or loss and the state of affairs of the group of companies of the
holding company as at the end of that financial year of the holding company,
stating-
(a) the names of the directors of the company in office at the date of the
report;
(b) the principal activities of the corporations in the group in the
course of the financial year and any significant change in the nature
of those activities during that period;
(c) the names of any subsidiaries acquired or disposed of during the
financial year, the consideration for each such acquisition or
disposal and the amount in each case of the net tangible assets of the
subsidiary acquired or disposed of and, in the case of a subsidiary
not being a wholly-owned subsidiary, the extent of the company's
interest in the subsidiary;
(d) the amounts and particulars of any material transfers to or from
reserves or provisions of a corporation in the group during the
financial year;
(e) where, during the financial year, any corporation in the group has
issued any shares or debentures-the purposes of the issue, the classes
of shares or debentures issued, the number of shares of each class and
the amount, term and rate of debentures of each class, and the terms
of issue of each class of the shares;
(f) the amount (if any) that the directors of the company recommend should
be paid by way of dividend, and any amounts that have been paid or
declared by way of dividend since the end of the previous
financial year of the company, indicating which of those amounts (if
any) have been shown in a previous report under this sub-section or
sub-section (1) or under a corresponding previous law of the
Territory;
(g) the amount (if any) of dividends paid to or declared in favour of the
company by each of the subsidiaries since the end of the previous
financial year and up to the date of the report, except so far as
those dividends are shown in the group accounts in accordance with the
regulations in force for the time being under sub-section 269 (8);
(h) whether, so far as debts owing to the company are concerned, the
directors of the company, before the profit and loss account and
balance-sheet were made out, took reasonable steps to ascertain what
action had been taken in relation to the writing off of bad debts and
the making of provisions for doubtful debts, and to cause all known
bad debts to be written off and adequate provision to be made for
doubtful debts;
(j) whether, at the date of the report, the directors of the company are
aware of any circumstances that would render the amount written off
for bad debts, or the amount of the provision for doubtful debts, in
the group of companies inadequate to any substantial extent and, if
so, giving particulars of the circumstances;
(k) whether the directors of the company, before the profit and loss
account and balance-sheet were made out, took reasonable steps to
ascertain whether any current assets of the company, other than
current assets to which paragraph (h) applies, were unlikely to
realize in the ordinary course of business their value as shown in the
accounting records of the company and, if so, to cause-
(i) those assets to be written down to an amount that they might be
expected so to realize; or
(ii) adequate provision to be made for the difference between the
amount of the value as so shown and the amount that they might
be expected so to realize;
(l) whether, at the date of the report, the directors of the company are
aware of any circumstances that would render the values attributed to
current assets in the group accounts misleading and, if so, giving
particulars of the circumstances;
(m) whether there exists at the date of the report-
(i) any charge on the assets of any corporation in the group that
has arisen since the end of the financial year and secures the
liabilities of any other person and, if so, giving particulars
of any such charge and, so far as practicable, of the amount
secured; and
(ii) any contingent liability of any corporation in the group that
has arisen since the end of that financial year and, if so,
stating the general nature of the liability and, so far as
practicable, the maximum amount, or an estimate of the maximum
amount, for which the corporation could become liable in
respect of the liability;
(n) whether any contingent or other liability of any corporation in the
group has become enforceable, or is likely to become enforceable,
within the period of 12 months after the end of the financial year,
being a liability that, in the opinion of the directors of the
company, will or may substantially affect the ability of the
corporation to meet its obligations as and when they fall due and, if
so, giving particulars of that liability;
(o) whether, at the date of the report, the directors of the company
are aware of any circumstances, not otherwise dealt with in the report or
group accounts, that would render any amount stated in the group accounts
misleading and, if so, giving particulars of the circumstances;
(p) whether the results of the operations of the group or of a corporation
in the group during the financial year were, in the opinion of the
directors of the company, substantially affected by any item,
transaction or event of a material and unusual nature and, if so,
giving particulars of that item, transaction or event and the amount
or the effect of that item, transaction or event, if known or
reasonably ascertainable; and
(q) whether there has arisen in the interval between the end of the
financial year and the date of the report any item, transaction or
event of a material and unusual nature likely, in the opinion of the
directors of the company, to affect substantially the results of the
operations of any corporation in the group for the next succeeding
financial year and, if so, giving particulars of the item, transaction
or event.
(3) In sub-sections (1) and (2) the expression ''any item, transaction or
event of a material and unusual nature'' includes but is not limited to-
(a) any change in accounting principles adopted since the last report;
(b) any material change in the method of valuation of the whole or any
part of the trading stock;
(c) any material item appearing in the accounts or group accounts for the
first time or not usually included in the accounts or group accounts;
and
(d) any absence from the accounts or group accounts of any material item
usually included in the accounts or group accounts.
(4) Where a company, other than a holding company for which group accounts are
required, has at any time granted to a person an option to have issued to him
shares in the company, the directors shall state in the report made under this
section-
(a) in the case of an option so granted during the financial year or since
the end of the financial year-
(i) the name of the person to whom the option was granted or, where
it was granted generally to all the holders of shares or
debentures or of a class of shares or debentures of that
company or of another corporation, that the option was so
granted;
(ii) the number and classes of shares in respect of which the option
was granted;
(iii) the date of expiration of the option;
(iv) the basis upon which the option is or was to be exercised; and
(v) whether any person entitled to exercise the option had or has
any right, by virtue of the option, to participate in any share
issue of any other corporation;
(b) particulars of shares issued, during the financial year or since the
end of the financial year, by virtue of the exercise of an option; and
(c) the number and classes of unissued shares under option as at the date
of the report, the prices, or the method of fixing the prices, of
issue of those shares, the dates of expiration of the options and
particulars of the rights (if any) of the holders of the options to
participate by virtue of the options in any share issue of any other
corporation.
(5) Where any of the particulars required by sub-section (4) have been stated
in a previous report, they may be stated by reference to that report.
(6) Where a holding company or any of its subsidiaries has at any time granted
to a person an option to have issued to him shares in the company or
subsidiary, the directors of the company shall state in the report made under
this section the name of the corporation in respect of shares in which the
option was granted and the other particulars referred to in sub-section (4).
(7) The directors of a company shall state in the report whether, since the
end of the previous financial year, a director of the company has received or
become entitled to receive a benefit, other than-
(a) a benefit included in the aggregate amount of emoluments received or
due and receivable by directors shown in the accounts or, if the
company is a holding company, the group accounts, in accordance with
the regulations made for the purposes of sub-section 269 (8); or
(b) the fixed salary of a full-time employee of the company or of a
related corporation, by reason of a contract made by the company or a
related corporation with the director or with a firm of which he is a
member, or with a company in which he has a substantial financial
interest, and, if so, the general nature of the benefit.
(8) Where there is attached to or included with a report of the directors laid
before a company at its annual general meeting or sent to the members under
section 274 a statement, report or other document relating to affairs of the
company or any of its subsidiaries, not being a statement, report or document
required by this Act to be laid before the company in general meeting, the
statement, report or other document shall, for the purposes of section 563, be
deemed to be part of that first-mentioned report.
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