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The Tax Publishers Matters to be included in Directors' Report--A brief Study Pragya Bhandari Every company must prepare Board's report which forms part of financial statements and contents of such report are also attached to financial statements, further, same are laid before a company in annual general meeting. It is pertinent to draft the Board's report carefully as failure on complying the provisions of Board's report attracts the penal provisions. The learned author in this article has cast thought on the contents of the Board's report. 1. Prologue Board's report is a statutory document. Every company must prepare Board's report to be presented to the members of the company, which forms part of the financial statements sent to them. The Companies Act, 2013 spells out the items which are to be disclosed in the Board's report and the documents that are to be attached as well as annexed. Section 134 of the Companies Act, 2013 casts a responsibility upon the Board of Directors to prepare and present a report every year along with the financial statements to the shareholders at the annual general meeting. Section 134(3) of the Companies Act, 2013 read with rules 8 and 9 of the Companies (Accounts) Rules, 2014, amended from time to time, contain detailed provisions regarding contents of Board's report. Moreover, MCA has notified exemption on dated 31^st July 2018 by inserting rule 8A to the Companies (Accounts) Rules, 2014 which specifically deals with the matters to be included in Board's report for one person company and small company. The key disclosures of Board's report are discussed hereunder-- 2. Web address instead of annual return extract In terms of the Companies (Amendment) Act, 2017, the Board's report must contain the web address where the copy of annual return has been placedon the website of company. Thus, the requirement of having extract of annual return in MGT-9 has been done away and now copy of annual return is required to be placed on website of company, if there is one; and only the web link/address is required to be disclosed in the Board's report. 3. State of company's affairs, etc. The Board's report should include -- (a) The state of the company's affairs; (b) The financial summary or highlights; (c) Change in the nature of business, if any; (d) Amounts, if any, which it proposes to carry to any reserves; (e) Amount, if any, which it recommends should be paid by way of dividend.; (f) Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. For instance, cancellation of or entering into contracts, awards in litigation, etc. affect the financial position of the company; SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Matters to be included in Directors' Report--A brief Study

Pragya Bhandari

Every company must prepare Board's report which forms part of financial statements and contents of such report are also attached to financial statements, further, same are laid before a company in annual general meeting. It is pertinent to draft the Board's report carefully as failure on complying the provisions of Board's report attracts the penal provisions. The learned author in this article has cast thought on the contents of the Board's report.

1. Prologue

Board's report is a statutory document. Every company must prepare Board's report to be presented to the members of the company, which forms part of the financial statements sent to them. The Companies Act, 2013 spells out the items which are to be disclosed in the Board's report and the documents that are to be attached as well as annexed. Section 134 of the Companies Act, 2013 casts a responsibility upon the Board of Directors to prepare and present a report every year along with the financial statements to the shareholders at the annual general meeting. Section 134(3) of the Companies Act, 2013 read with rules 8 and 9 of the Companies (Accounts) Rules, 2014, amended from time to time, contain detailed provisions regarding contents of Board's report. Moreover, MCA has notified exemption on dated 31^st July 2018 by inserting rule 8A to the Companies (Accounts) Rules, 2014 which specifically deals with the matters to be included in Board's report for one person company and small company. The key disclosures of Board's report are discussed hereunder--

2. Web address instead of annual return extract

In terms of the Companies (Amendment) Act, 2017, the Board's report must contain the web address where the copy of annual return has been placedon the website of company.

Thus, the requirement of having extract of annual return in MGT-9 has been done away and now copy of annual return is required to be placed on website of company, if there is one; and only the web link/address is required to be disclosed in the Board's report.

3. State of company's affairs, etc.

The Board's report should include --

(a) The state of the company's affairs;

(b) The financial summary or highlights;

(d) Amounts, if any, which it proposes to carry to any reserves;

(e) Amount, if any, which it recommends should be paid by way of dividend.;

(f) Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. For instance, cancellation of or entering into contracts, awards in litigation, etc. affect the financial position of the company;