A Board report is a document produced by the board of directors under the requirements of The Companies Act, 2013, which details the state of the company and its compliance with a set of financial, accounting and corporate social responsibility standards.
The requirement for directors’ reports arose out of a general move for greater transparency in corporate governance. It is useful for shareholders to find out issues such as whether the company has good finances, whether the market has potential, and whether the business has the structural capacity to expand into new opportunities. In order for shareholders to make informed decisions when casting their votes at annual or other meetings, the Directors’ Report provides part of that essential minimum standard of information.
There is no definition given in any of Indian Law which defines a Board Report. However, a Board report is a report prepared by Board of company in which they states all the working and major accomplishment of company both in qualitative as well as quantitative terms.
Yes, it is mandatory to prepare a Board Report as per section 134 of the Companies Act, 2013. A Board Report is prepared for every financial year along with financial results of the company and should be placed in every Annual General Meeting.
Every Company needs to prepare a Board report for each Financial Year like:-
One person Company need not to prepare a Board report, they will attach a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.
A Board report is typically prepared after a financial year end, though material changes are also taken in Board Report.
A Board report is generally prepared by Company secretary of the company but if a company is not required to appoint a company secretary any authorized person who has good knowledge of Law can prepare it.
As per section 134 of The companies Act, 2013, there are many points which are governed in Board report. As the matter is too lengthy, I will prepare a separate article for matters to be included in Board report thoroughly.
Yes, very much. A per the Companies Act, 2013, it is mandatory for every company to place it in Every Annual General Meeting.
The Board’s report and any annexures shall be signed by its chairperson of the company if he is authorised by the Board and where he is not so authorised, shall be signed by at least two directors, one of whom shall be a managing director, or by the director where there is one director.
If a company contravenes to prepare a Board report, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.
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