Statutory and Non-Statutory Report | Meaning | Examples | Contents

What is a Statutory Report

According to Companies Act 1956, a report is prepared by the board of directors of every public limited company and forward the same to its every shareholder, called statutory report, at least 21 days before the day on which the statutory meeting is to be held. A copy of statutory report should be submitted before the Registrar of Joint Stock Companies.

Statutory and Non-Statutory Report - Meaning, Examples, Contents
Image: Statutory and Non-Statutory Report – Meaning, Examples, Contents

Examples of Statutory Reports

The followings are the examples of statutory report.

1. Statutory Report submitted at the statutory meeting of the company.

2. Directors’ Report to the Annual General Meeting.

3. Annual Returns.

4. Auditors’ Report.

5. Reports by Inspectors appointed to investigate the affairs of the company.

Contents of Statutory report

The statutory report contains the following information.

1. Total number of shares allotted whether fully paid up or partly paid up.

2. Total cash received for shares allotment.

3. An abstract of cash receipts and payments.

4. The name, address, occupation of the directors of the company.

5. Material information of a contract.

What is a Non-Statutory report

Non-statutory reports are prepared in order to help the board of directors or top executives to take a quality decision for the effective control and management of business organization but not required under the provisions of any law. These reports are prepared whenever demanded by the Secretary or by the Directors or their committees for submission to the shareholders, directors, employers or committee or sub-committees.

Examples of Non-Statutory Report

  1. Reports of Directors to Shareholders.
  2. Reports of Committees of Directors appointed by the Board.
  3. Reports of Individual Officers of the company i.e. Secretary, Auditor, Manager etc.

1. Reports of Directors to Shareholders

The Board of Directors are preparing the report with regard to any specific problems or any new projects and presented in the Annual General Meeting. Sometimes, the report is annexed with the Profit and Loss Account and Balance Sheet of preceding accounting year.

Contents of the Directors’ Report

Generally, the directors report contains the following information.

1. The state of affairs of the company.

2. The declaration of dividend.

3. Amount proposed to be carried on to reserved capital.

4. Any major changes in the financial commitment of last accounting period.

2. Reports of Committees of Directors

The committees are formed by the Board of Directors in order to help them for able administration of the company. Such committees are standing committees. Examples for standing committees are Finance Committee, Project Committee, Share Allotment Committee, Share Transfer Committee etc., These committees are reconstituted according to the need basis. These committees submit their reports directly to the Board.

3. Reports of Individual officers of the Company

The term reports of individual officers of the company includes Company Secretary, Auditor, General Manager, Special Officer etc. Out of these persons, secretary is asked to prepare the report frequently with regard to the following matters.

  1. Selection of suitable site for new branch.
  2. Complaints from branch offices.
  3. Complaints of customers.
  4. Complaints of suppliers.
  5. Suspected irregularities in anyone or more departments.
  6. Improvements in office organization.
  7. General behavior of the employees.
  8. Causes of discontent among the employees.
  9. Valuation of stocks and their levels of stocks in terms of quantities.
  10. Threatened strikes.
  11. Prospects and position of a business which is going to be taken over.
  12. Proposed improvement in the working conditions of employees.