Board’s Report Disclosure requirement as per Companies Act, 2013

CS Nupur Gupta 01 Jan 2021 6,003 Views 0 comment Print Company Law | Articles

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Disclosure in Board’s report as on December 2020 – Hereinbelow list of all the disclosure requirement in Board’s report as per Companies Act, 2013 along with amendments time to time.

Clause	Section 134(3)	Amendments
a	the extract of the annual return as provided under sub-section (3) of section 92	Companies (Amendment) Act, 2017 – W.e.f. 31.07.2018:- the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed
b	number of meetings of the Board
c	Directors’ Responsibility Statement
ca	details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government	Inserted by Companies (Amendment) Act, and is effective from 29th May 2015.
d	a statement on declaration given by independent directors
e	in case of a company covered under sub-section (1) of section 178 company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director	In case Government company – shall not apply
f	explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made (i) by the auditor in his report; (ii) by the company secretary in practice in his secretarial audit report
g	particulars of loans, guarantees or investments under section 186
h	particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form
i	the state of the company’s affairs
j	the amounts, if any, which it proposes to carry to any reserves;
k	the amount, if any, which it recommends should be paid by way of dividend
l	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
m	the conservation of energy, technology absorption, foreign exchange earnings and outgo, in such manner as may be prescribed
n	a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company;
o	the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;
p	case of a listed company and every other public company having such paid-up share capital as may be prescribed, a statement indicating the manner in which formal 8[annual evaluation of the performance of the Board, its Committees and of individual directors has been made	In case Government company – shall not apply
	Provided that where disclosures referred to in this sub-section have been included in the financial statements, such disclosures shall be referred to instead of being repeated in the Board’s report.	Inserted by The Companies (Amendment) Act,2017 – Amendment Effective from 31st July, 2018
	Provided further that where the policy referred to in clause (e) or clause (o) is made available on company’s website, if any, it shall be sufficient compliance of the requirements under such clauses if the salient features of the policy and any change therein are specified in brief in the Board’s report and the web-address is indicated therein at which the complete policy is available	Inserted by The Companies (Amendment) Act,2017 – Amendment Effective from 31st July, 2018

Sub Section	Section 177
8	The Board’s report under sub-section (3) of section 134 shall disclose the composition of an Audit Committee and where the Board had not accepted any recommendation of the Audit Committee, the same shall be disclosed in such report along with the reasons therefor.
10	Details of establishment of vigil mechanism shall be disclosed by the company in the Board’s report S-177(9) Every listed company and the companies belonging to the following class or classes shall establish a vigil mechanism for their directors and employees to report their genuine concerns or grievances-(a) the Companies which accept deposits from the public; (b) the Companies which have borrowed money from banks and public financial institutions in excess of fifty crore rupees


Sub-Rule /Clause	Rule 8 of Companies (Accounts) Rules, 2014 (not applicable on OPC and small company)	Amendments
1	The Board’s Report shall be prepared based on the stand alone financial statements of the company and the report shall contain a separate section wherein a report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement is presented	Substituted by the Notification Companies (Accounts) Amendment Rules, 2016 Dated 27th July, 2016. “and shall report on the highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the company during the period under report”
2	The Report of the Board shall contain the particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the Form AOC-2
3	Conservation of energy, Technology absorption, Foreign exchange earnings and Outgo
4	Every listed company and every other public company having a paid up share capital of twenty five crore rupees or more calculated at the end of the preceding financial year shall include, in the report by its Board of directors, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors
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i	the financial summary or highlights
ii	the change in the nature of business, if any;
iii	the details of directors or key managerial personnel who were appointed or have resigned during the year
iiia	a statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year	Inserted by the Companies (Accounts) Amendment Rules, 2019 Amendment Effective from 1st December 2019
iv	the names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year
v	the details relating to deposits, covered under Chapter V of the Act,
vi	the details of deposits which are not in compliance with the requirements of Chapter V of the Act
vii	the details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future
viii	the details in respect of adequacy of internal financial controls with reference to the Financial Statements
ix	a disclosure, as to whether maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained	Inserted by The Companies (Accounts) Amendment Rules,2018
x	a statement that the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013]	Inserted by The Companies (Accounts) Amendment Rules,2018

Sub-Rule/ Clause	Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.	Amendment

1	Every listed company shall disclose in the Board’s report-
i	the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year
ii	the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year
iii	the percentage increase in the median remuneration of employees in the financial year
iv	the number of permanent employees on the rolls of company
v	the explanation on the relationship between average increase in remuneration and company performance	omitted w.e.f. 30.06.2016
vi	comparison of the remuneration of the Key Managerial Personnel against the performance of the company	omitted w.e.f. 30.06.2016
vii	variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year	omitted w.e.f. 30.06.2016
viii	average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;
ix	comparison of the each remuneration of the Key Managerial Personnel against the performance of the company	omitted w.e.f. 30.06.2016
x	the key parameters for any variable component of remuneration availed by the directors	omitted w.e.f. 30.06.2016
xi	the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year	omitted w.e.f. 30.06.2016
xii	affirmation that the remuneration is as per the remuneration policy of the company

2	The board’s report shall include a statement showing the name of every employee of the company, who	W.e.f. 30.06.2016 = The board’s report shall include a statement showing the names of the top ten employees in terms of remuneration drawn and the name of every employee, who
	i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees	w.e.f. 30.06.2016 one crore and two lakh rupees
	ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month;	w.e.f. 30.06.2016 eight lakh and fifty thousand rupees per month;
	iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.
3	The statement referred to in sub-rule (2) shall also indicate
	(i) designation of the employee;
	(ii) remuneration received;
	(iii) nature of employment, whether contractual or otherwise;
	(iv) qualifications and experience of the employee;
	(v) date of commencement of employment;
	(vi) the age of such employee;
	(vii) the last employment held by such employee before joining the company;
	(viii) the percentage of equity shares held by the employee in the company within the meaning of clause (iii) of sub-rule (2) above; and
	(ix) whether any such employee is a relative of any director or manager of the company and if so, name of such director or manager:

Secretarial Standards	The Report of the Board of Directors shall include a statement on compliances of applicable Secretarial Standards.