A Director’s Report Singapore is an important part of a company’s audited or unaudited accounts and annual report. It is accompanied by the financial statements like cash flow, balance sheet, etc.
The filing of Auditor’s Report and Director’s Report as part of the annual filing requirements is important for companies. It improves their credibility in the eyes of investors’ and shareholders’ of the company. The documents are part of a system of checks and balances to ensure sound financial practices.
Small Companies Criterion: Are You Audit Exempted
The private companies that qualify as Small Companies are exempted from the audit requirements. However, they too are expected to file their unaudited accounts with the Director’s Report.
According to the audit exemption for Small Companies criterion effected on 1 July 2015, a private company must fulfill at least 2 of 3 following conditions to qualify for the exemption:
- Total annual revenue ≤ $10 million;
- Total assets ≤ $10 million;
- Number of employees ≤ 50
As per the guidelines of ACRA, a Singapore company has to submit its audited or unaudited accounts along with a Director’s Report to ACRA within one month of its AGM (Annual General Meeting). A newly formed company needs to hold its AGM within the 18 months from the date of its registration. Afterward, it has to hold its AGM’s once each calendar year. The consecutive AGM’s should be within 15 months of each other.
MC Group provides a full accounts services, drafting of un-audited Financial reports for exempt companies and offering audit service through our associate audit firms. Our audit services include all financial statements designed specifically to comply with ACRA’s and the Inland Revenue Authority of Singapore (IRAS) statutory requirements.
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Preparation of Director’s Report
The Directors are responsible for preparing financial statements for each financial year in accordance with the Financial Reporting Standards (FRSs) and general accounting practice. The statements must give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with reporting standards.
Preparing the Annual financial statement is a tedious task which needs meticulous processing of records of financial transactions. At Rikvin, our experts can minimize the pressure on your in-house resources by helping you in:
- selecting and applying suitable accounting policies
- preparing financial statements in line with the international accounting standards
- presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information
- providing additional disclosures to enable clear understanding of transactions, other events and conditions on the entities financial position and financial performance
Companies are legally obliged to include a Director’s Report in their annual financial statement. The report must give a fair review of the company’s financial and operational results and condition and also include additional information such as dividend recommendation, reserved earnings, details of directors and their interest, principal risks and uncertainties etc.
Director’s Report is an important communication medium for a company to interact with various interest groups such as investors, creditors, government bodies, business analysts etc. Therefore it is essential to ensure that the report includes all the relevant information succinctly yet without any ambiguity.
What Constitute the Director’s Report?
The Section 201 of the Singapore Companies Act, asks for the inclusion of the following things in a Director’s Report:
- Approved by a Director’s resolution in writing
- Signed by the sole director or minimum of two directors (if there are 2 or more directors)
- Covers company’s profit and loss for the financial year
- Statement to shade light on the state of company’s affairs at its financial year end
- Details of the directors as of on the date of the Director’s Report
- Disclosure of each director’s interests in the company
Preparation of Auditor’s Report
Companies are required to submit an Independent Auditor’s as well as Director’s Report as part of their annual filing requirements. Both reports are part of a system of checks and balances to ensure sound financial practices, and in turn, enhance investors’ confidence and uphold shareholders’ interest.
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