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1. Corporate Reporting

3. Introduction
The Primary function of accounting is to
accumulate and communicate information
essential to an understanding of the activities
of an enterprises, whether large or small,
corporate or non-corporate, profit or non-
profit, public or private.

4. Meaning
The exact definition of corporate reporting
differs depending on who you speak to.
However, throughout this web site we use the
term ‘corporate reporting’ to refer to the
presentation and disclosure aspects ― as
distinct from accounting/measurement

5. Features of Corporate Reporting
1. Credible
2. Relevant
3. Authentic
4. Engaging
5. Digestible

6. 2-Relevant
The task of prioritizing social
and environmental issues for
strategic planning and
reporting purposes can be
daunting for any company. The
key is to identify and illustrate
issues that are highly material
– those that have the greatest
potential to impact the
company’s long-term success
and that matter to its most
relevant stakeholders.

7. 3-Authentic
Although “authenticity” has
become a business buzzword,
it’s often an afterthought in the
CR reporting world. Reports
that lack authenticity miss a
valuable opportunity to build a
connection with stakeholders.
One way to test the
authenticity of your reporting is
to ask a range of employees at
various levels and from various
departments within your
company to review draft
content.

8. 4-Engaging
Over the last five years
many companies have
made the jump from print
to online reporting formats
(or a hybrid of the two),
and some have gone a step
further. We’re thrilled to
see companies aren’t just
focusing on what is
presented but how it’s
presented, with improved
design and functionality.

9. 5-Digestible
One of the most
challenging aspects of CR
reporting is the balancing
act between being
thorough and concise.
Companies with good
intentions that aim for a
high level of
transparency sometimes
over share and lose their
audiences in the weeds.

10. Objectives of Corporate Reporting
• Giving information primarily for those to specific users.
• Giving information about the performance of the company.
• Giving information about the difficulties faced by the company
• Information about sources and applications of funds during the
year.
• information about the products of the company
• Information about the loan taken & loan give.
• Information about the research and development undertaken
during the year and the progress made thereof
• Information about the capital project..
• Information about employees management relations.
• Information about the economics scene and its effect on the
performance.

11. Users of Accounting Information

12. External Users of Accounting Information
a) Investors
b) Creditors
c) Member of Non-Profit organization
d) Government
e) Consumers
f) Research Scholars

13. Internal Users of Accounting Information
a)Owners
b)Management
c) Employees

14. Statutory Reporting and
Non-Statutory Reporting

15. Statutory Reporting
Statutory reporting is that
which is to be done as per
provisions of the law. The
companies act make it
compulsory for the board
of directors to lay before
the company’s annual
general meeting a copy of
the statement of Profit
and loss, Balance sheet
together with the direct
ors and auditors Reports.

16. Non-statutory
Non-Statutory
Reporting may not be
required legally but a
company may be
voluntarily reporting
to shareholders on
some matters which
may be important to
them and other
members of the
public.

17. Deductive & Inductive
Approach in Reporting

18. Deductive Approach
This approach starts with
objectives of reporting
and from these objectives
logical principles are
derived that provide the
basis for reporting. In this
approach, determination
of objectives is most
important because
different objectives need
entirely different
structures and result in
different methods.

19. Inductive Approach
This approach is a positive
and realistic approach. In
this approach detailed
observations are made for
few items and on the basis
of detailed observations
generalizations are made
and principles are framed.
This approach makes an
attempt to state what
financial information is
collected, analyzed and
communicated.

20. Directors Report
Director’s report is written by the directors of
a company and forms the part of company’s
financial statement. The report gives the
details of company’s state and its compliance
with a statement of financial, accounting and
corporate social responsibility standards.

21. Need of Directors Report
The need for director’s report arose out of the
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 company has the structure
capacity to expand into new opportunities.

22. Directors Report- disclosure Requirements
Under the Companies Act, 2013
Every year directors of a company have to
prepare a report for the company’s members to
explain what the company has been doing and its
plans for the future the report is typically
prepared on a quarterly and annual basis. It
includes detailed items such as the accountant’s
financial analysis and management
recommendations the report is usually unedited.
A statement by a company’s director in its annual
accounts giving the director’s opinion of the state
of the company, and how much should be paid to
people owning shares in the company.

24. Disclosures in the
Board’s Report

25. Information required to be
given the Board’s report
• State of affairs of the company
• Amounts, if any, they proposed to carry to reserves in the
Balance sheet.
• The amount, if any, which they recommend should be
paid by way of dividend.
• Material changes and commitments, if, any affecting the
financial position of the company which have incurred
between the end of financial year and the date of report.

26. Changes to be mentioned
in the Board’s report
• Changes in the class of business in which the company
has an interest.
• Changes in the nature of the company’s business
• Changes in the company’s subsidiaries or in the nature of
business carried by them.

27. Director’s Responsibilities statement
• That in the preparation of the annual accounts, the
applicable accounting standards had been followed
along with proper explanation relating to material
departures.
• That the directors had taken proper and sufficient care
for the maintenance of adequate accounting records in
accordance with the provisions of this Act for
safeguarding the assets of the company and for
preventing and detention fraud and other irregularities
• That the directors had prepared the annual accounts on
a going concern basis.

28. Corporate Social Responsibility
Every company having net worth rupees five hundred
crores or more, or turnover of rupees one thousand crore
or more a net profit of rupees five crore or more during any
financial year shall constitute a corporate social
reasonability committee of the Board Consisting of three or
more directors, out of which at least one director shall be
an independent director. This committee shall monitor the
corporate social responsibility Policy of the company from
time to time. The Board of every company shall ensure that
the company spends in every financial year, at least two per
cent, of the average net profits of the comp-any made
during the three immediately proceeding financial years, in
pursuance of its corporate social responsibility policy.

30. Corporate Social Responsibility
1. Corporate governance
2. Director’s responsibility statement as
required U/S 154 of companies Act, 2013.

31. Auditor’s Report
The auditor’s report is a formal opinion or
disclaimer thereof, issue either by an internal
auditor or external auditor after the conduct
of internal or external audit. The Internal audit
is an independent.

32. Types of Audit Report
1.Unqualified opinion
2.Qualified opinion
3. Adverse opinion
4. Disclaimer of opinion

33. Current Practices of corporate Reporting
Accounting is the language employed for communicating
financial information of a concern to various who are
interested in such information. Communication of financial
information and other information by published accounts
serves its purpose only if it satisfies the needs of persons
well-versed in accounting language on the one hand
layman not familiar with accounting techniques on the
other. Keeping in view the complicacies of statuary forms as
prescribed in the companies Act, now-a-a days it is a
common practice to add to the statement of profit and loss
and the balance sheet drawn in statutory forms, some
voluntary supplementary information in a simple manner
as would be easily understood by a layman.

34. Current Practices of Corporate Reporting
• This voluntary information may include the following:
• Presentation of the highlight of the information contained in the published
accounts.
• Preparing cash flow statement
• Preparing fund flow statement
• Provision of important accounting ratios
• Discloser of accounting policies
• Use of charts, graphs and diagrams
• Use of schedules
• Impact of price level accounting
• Rounding-off of figures
• Segmental reporting
• Social accounting
• Human resource of accounting
• Corporate governance report

35. A-Summarized Statement of profit and
Loss and balance Sheet

36. Summarized Statement of profit and
Loss and balance Sheet

37. Summarized Statement of profit and
Loss and balance Sheet

38. B-Highlights
Highlights are usually
shown at the
beginning of the
annual report so that
the reader may come
across the important
facts of the company
immediately as he
opens thereof.

39. C-Cash Flow Statement
An enterprise should disclose
together with a commentary
by the management, the
amount of significant cash
and cash equivalent balances
held by the enterprise that
are not available for use by it.
Information about the cash
flows of an enterprise is
useful in providing users of
financial statements with a
basis of assess the ability of
the enterprise to generate
cash and cash equivalent and
the needs of the enterprise to
utile those cash flows.

40. D-Funds Flow Statement
The funds statement
is becoming popular
day by day because it
explains why in spite
of huge profits
earned by the
company, it is facing
difficulty in making
the payment to
creditors in time.

41. E-Provision of Important Ratios
1. Current ratio i.e. Current Assets
Current liabilities
2. Liquid ratio i.e. Current Assets-Inventory
Current Liabilities
3. Percentage of current assists to
Total Assets i.e. Current AssestsX100
Total Assets
4. Ratio of shareholders Fund to
Fixed Assets i.e. Shareholders Fund
Fixed Assets
4. Dividend per share
5. Earning per share i.e. Net Profit
No. of shares

42. F-Disclosure of Accounting Policies
Now a days progressive
companies also disclose
accounting policies in
their published accounts
on the basis of which
they have prepared
their financial
statements. This is done
with a view to giving
better understanding of
the financial statements
to the public.

43. G-Use of Charts, graphs and diagrams

44. H-Use of Schedules
Now a days efforts are
made to make the
balance sheet and profit
and loss account as
compact as possible.

45. I-Impact of Price level changes
Prices do not remain constant; they go on
changing every day.

46. J-Rounding Off of figures
The Sachar Committee has recommend that
companies should be given the option to
round off the figures in the balance sheet to
the nearest thousand or hundred or ten
rupees.

47. K-Segmental Reporting
Recent trend is to make available to the users
of financial statements regimental information
based on geographical and business segments
for assessing the prospects and risks of a
diversified enterprises.

48. L-Social Accounting
The main emphasis for evaluation of a
business unit was on commercial aspects the
social aspect has so far been ignored.

49. Human Resource of Accounting
It is known fact that
success of an
organization depends
on the quality, caliber
and character of the
people working in it.

50. Corporate Governance Report
It is a system by
which companies
are directed and
controlled.
Everyone who is a
part of the system is
contributing to
corporate
governance.

51. Interim Financial Reporting
In addition to financial reporting at the end of the
accounting year covering a period of one year,
there can be interim financial reporting covering
a period of less than a year.
Following Components is:-
a) Condensed balance sheet
b) Condensed statement of profit or loss
c) Condensed cash flow statement
d) Selected explanatory notes

52. Harmonization of Corporate Reports
With the expansion of international trade and
functioning of international capital market,
business has become global. This has
necessitated the communication across the
borders. Now days corporate reports are not
used solely within the boundaries of single
country alone.

53. Advantages of Harmonization of Corporate Reports
1. Corporate reports based on different accounting practices of different
countries will not meet the requirements of investors in more
sophisticated countries.
2. The need for harmonization of corporate reports is felt when funds from
overseas markets are required.
3. Removal of trade barriers and technological advancement has led to the
expansion of international trade.
4. Uniform corporate reports facilitate comparison and help in taking
rational decisions because corporate reports in different countries.
5. Harmonization of corporate reports will reduce the cost of preparation
of a report in case of multinational companies because same principles
will be followed for units set up in different countries.
6. Uniforms corporate reports will facilitate merger of companies because
financial statements forming part of corporate reports of different
entities will be based on same principles.

54. Conclusion
Outdoor Equipment Ltd is not in a very secure
financial position. Improvements in every area
of the company are needed if the company is,
in the first instance, to survive and then grow.
The key areas of reform are the liquidity of the
company and the quantity and quality of
working capital, profitability, and financial
stability. Management must address these
areas simultaneously if the company is to
overcome its present poor record.