This case study is based on what directors must disclose in a directors' report in the annual report. This case study is of a simulated company which has been effected of COVID 19 pandemic from the period 1 July 2020 to 30 June 2021.

Australia is a dominant player in the world barley export market.The Company X Ltd is producing two types of barley it's producing malting barley (30 - 40 percent export market) and feed barley (20 - 30 percent export market).Demand for high quality barley was strong both in domestically and internationally.Australian barley is recognised for its excellent malt and feed qualities. The Company X Ltd sells its products both in Australia (30%) and overseas (70%) - majority in Saudi Arabia. The Company X is a key participant in its market, holding a market share of approximately 30%. With a very diverse customer base, the company does not have any dependencies on key customers. The decision by the Saudi Arabia government to lockdown many towns and cities in response to COVID-19 significantly reduced demand, and sales in Saudi Arabia fell by 40% from 1 July 2020 to 30 June 2021.

This weakening in sales resulted in an underperforming against the target of a 12% growth in the Saudi Arabia market. Analysts report similar falls in peer companies such as Y and Z. Australian sales were less affected, falling by 9% over the period 1 July 2021 to 30 June 2021. This underperformed the target of a 2% growth in that market. Inventory has decreased compared to last year as the company took steps to reduce production in line with falling demand from March 2020.

A cost reduction program to preserve cash was implemented in May. Savings have been made by stopping overtime, inventory reduction, and a pause on hiring. This is improving the company's cash position. Wages have reduced by $15,799,324 mainly as a result of stopping overtime and by dropping the employment of casuals in the manufacturing part of the business. The executive team willingly reduced their wages by 25 per cent from 1 July 2020. No incentive payments will be made this year.

The Company has budgeted for a 7 per cent reduction in operating costs compared to the 2019-20 financial year. One-off redundancy costs of $2,025,000 were also incurred. This was largely due to reductions in sales and marketing, logistics and administration staff as part of the cost reduction exercise. The Company X Ltd was eligible for the Australian Government's Job Keeper payment and was assessed as eligible on 12 April 2020 with payment backdated to 1 March 2020.

The government Job Keeper payment applied to all of the Company's employees within Australia and payment of $20 000 000 was made. The Company's cash position has reduced compared to the end of last year. As at 30 June 2021 the Company has $18.3 million in cash compared to $25.4 million at 30 June 2020. The Company X Ltd was able to increase its turning credit facility with its lender from $ 50 to $100m.

Required:

Based on above case study:

a.Why are directors' declaration important and what might the directors consider including in the director's report in 20-21 Company X financial reports and

b.By analysing the data provided in the case study what do you think the future direction of Company X?