Management discussion and analysis requirementsThe Management Discussion and Analysis Report is mandatory as per Companies Act 2013 and in terms of listing agreement with the exchanges. It usually forms a part of the directors' report in an Annual Report or is an addition thereto.
Contents of Management Discussion and Analysis reportThis Management Discussion & Analysis should include discussion on the following matters as long as it's within the limits set by the competitive position of the company:
- Structure of the Industry and developments affecting the industry - either competitive or regulatory.
- A SWOT analysis focussing of the Business Opportunities and Threats.
- Gist of the financial performance of the year gone by and commentary on key elements of the financials.
- Performance Break down either Segment–wise or product-wise.
- Outlook for the future
- Key Risks to business and concerns and steps taken to mitigate impact of risks.
- Description of the company's Internal control systems & their adequacy.
- Specific discussion on operational performance parameters.
- Company specific developments with respect to Entry/Exit of Key Managerial Personnel and overall employment status of the company.
- Specific disclosures in case of Related party transactions that may need to be highlighted to ensure there is no conflict of interest and absolute transparency in the conduct of business.