Let's Prepare Board's Report

What is Board Report?

As we all knew annual filing of companies started hitting the company and compliance officers of companies have pulled up their socks to start filing of the forms. And if you are one of them amongst them then you must start preparing all the documents as per the provisions of the companies act, 2013.

Board's report is one of the most important documents besides other documents. It is considered as the responsibility of the board of directors to present board's report before the shareholder in the Annual General Meeting of the private limited company. Board's Report is the comprehensive documents of the Pvt ltd companies which contain both financial and non-financial information.

The board's report enables the stakeholders such as bankers, government, and prospective investors etc to assess the company's performance on the key factors which is indicative of the corporate governance practice.

Disclosure of the information in Board's Report

Board's report is the basic disclosure of the transaction which occurres during the particular financial year. These disclosures are as follows:

1. Extract of the annual return under section 92 of the companies act, 2013. The Extract of such Annual Return shall be in Form MGT-9
2. Number and dates of board meetings of the board and attendance of the directors. There have to be at least 4 board meetings in a year.
3. Director's responsibility statement;
4. Details of the frauds as reported by the auditors
5. Declaration by the Independent directors. This declaration is with respect to meet the criteria of being independent which are required to be given at the meeting in which he participates as director and thereafter at every first board meeting in a financial year.
6. If the company has constituted Nomination and Remuneration Committee, then it is required to disclose the company's policy on directors appointment and remuneration including criteria for determining qualification, positive attributes.
7. Explanation and comment by the boards on every adverse remark made by the auditors
8. Particulars of loans, guarantees or investment made by the company during the financial year. Since there is no prescribed format to give the details of the said items, so one can use the format as prescribed in form MBP-2.
9. The amounts which are proposed to be transferred to the reserve account;
10. The amount proposed as dividend;
11. Particulars of the contracts with related parties as provided under section 188. The particulars of the contract can be reported in the form AOC-2.
12. Material changes in the financial position of the companies which have occurred between the end of the financial year of the company to which the financial statements relate. Some of the instances which can be covered under this point are as follows:
13. Substantial decline in the market value of the statement.
14. A major fire in the factory.

• Major business combination or disposal of the subsidiary.

1. Approval of major restructuring.
2. The conservation of energy, technology absorption, foreign exchange earnings and outgo.
3. Details policy developed and implemented by the company on corporate social responsibility (CSR) initiative taken during the year.

These are some of the important matters which must be disclosed in the board report. So be prepare to complete the compliance of your private limited companies.