Ministry of Corporate Affairs

Government of India
www.mca.gov.in

BOARD’S REPORT

L E A D P A R T N E R I N S T I T U T E S

ICAI
Board's Report
Board's Report is a comprehensive document
circumscribing both financial and non-financial
information, serving to inform the stakeholders about the
overall financial position of the Company and its operation
& business scope. There is no restriction to put any matter
in the Board's Report if the Directors have intention to
mention anything apart from legal provisions.

DISCLOSURES BY BOARD
DISCLOSURES UNDER SECTION 134(3) OF THE COMPANIES ACT, 2013
• An extract of annual return under section 92(3)
• Number of meetings of board
• Director's responsibility statement
• Statement on declaration given by independent director under section 149(6)
• Particulars of loan, guarantees or investments under section 186
• The state of company's affairs
• Particulars of contracts and arrangements with related parties
• Statement relating to risk management policy
• Statement on corporate social responsibility
• The amount proposed to carry to any reserve
• The amount proposed to be paid by way of dividend
• Conservation of energy, technology absorption, foreign exchange earnings and outgo
• Explanation or comments of Board on qualifications, reservations made by Auditors
or Secretarial auditors

OTHER DISCLOSURES UNDER COMPANIES ACT, 2013

• Appointment of independent director
• Disqualification of Director under section 164
• Change in the composition of the Board
• Redemption of shares/debentures
• Disclosure about the composition of audit committee under section 177(8)
and also the recommendation of audit committee
• Details of establishment of vigil mechanism [section 177(9)]
• Policies by the nomination and remuneration committee
• Secretarial report given by a company secretary in practice.

DISCLOSURES UNDER VARIOUS RULES MADE UNDER

COMPANIES ACT, 2013
• Disclosure under Rule 8 of Companies (Accounts) Rules, 2014
• Disclosure under Companies (Share Capital and Debentures), Rules, 2014
• Disclosure under Rule 5 of Companies (Appointment & Remuneration of Managerial
Personnel) Rules, 2014
• Disclosure under Rule 8 of Companies (Corporate Social Responsibility) Rules, 2014.

SEBI (LISTING OBLIGATIONS DISCLOSURE REQUIRMENTS), 2015

• Related Party Disclosure
• Management Discussion and Analysis
• Corporate Governance Report
 OTHER DISCLOSURES UNDER (iii) all public companies, having in aggregate, outstanding
loans or borrowings or debentures or deposits
COMPANIES ACT, 2013 exceeding Rs.50 Crores or more.

Ü Independent Director The Board's Report under section 134(3) shall disclose the
composition of an Audit Committee and where the Board
An Independent Director is a person who is not related to had not accepted any recommendation of the Audit
the promoters or the other members of the company. As Committee, the same shall be disclosed in such report
per section 149(10) an independent director shall hold along with the reasons therefor [Section 177(8)].
office for a term up to five consecutive years on the Board
of a company, but shall be eligible for reappointment on Ü Vigil Mechanism
passing of a special resolution by the company and
disclosure of such appointment in the Board's report. Section 177(9) read with Rule 7 of the Companies (Meeting
[Subject to the provisions of 152, i.e., Appointment of of Board and its Powers) Rules, 2014 provides that every
Directors)] listed company and the companies belonging to the
following class or classes shall establish a vigil mechanism
Ü Disqualification of Director under section 164(2) for their directors and employees to report their genuine
concerns or grievances-
Disclosure of disqualification of Director on account of non
filing of financial statements or annual returns for (a) the Companies which accept deposits from the public;
continuous period of 3 years or non-repayment of (b) the Companies which have borrowed money from
deposits, non-redemption of debentures, non-payment of banks and public financial institutions in excess of fifty
declared dividend. crore rupees.

Ü Change in the composition of the Board The vigil mechanism shall provide for adequate safeguards
against victimisation of persons who use such mechanism
Any appointment, reappointment or change in the office of and make provision for direct access to the chairperson of
a director (including whole-time director, additional the Audit Committee in appropriate or exceptional cases.
director, alternate director or a director filling a casual
vacancy) whether by virtue of rotation, resignation, death The existence of the mechanism may be appropriately
or otherwise should be indicated in the Board's Report. communicated within the organization. The details of
establishment of Vigil mechanism shall be disclosed by the
Section 168(1) requires that the fact of resignation of a company on the website, if any, and in the Board's Report.
director be placed in report of directors laid in the (Section 177 (10) of the Act)
immediately following general meeting of the Company.
Ü Nomination and Remuneration Committee
Ü Redemption of shares/debentures
The Board of directors of every listed company and the
It is necessary in view of Section 164(2), Section 167(1) and following classes of companies shall constitute Nomination
Schedule V Part II of Companies Act, 2013 that where the and Remuneration Committee of the Board-
redemption of debentures or preference shares was due (i) all public companies with a paid up capital of ten crore
during the year but has not taken place, the Board's Report rupees or more;
should explain the reasons thereof.
(ii) all public companies having turnover of one hundred
Further, if there is any variation in the rights of any one class crore rupees or more;
of shareholders disclosure regarding the same should be (iii) all public companies, having in aggregate, outstanding
given in the Board's Report along with the following details: loans or borrowings or Debentures or deposits
(a) Type of shareholder exceeding fifty crore rupees or more.
(b) No. of shares held by each shareholder The Nomination and Remuneration Committee should
(c) Existing amount per share consist of three or more non-executive directors out of
(d) Type of variation which not less than one-half shall be independent
(e) Details of resolution passed directors:
Provided that the chairperson of the company (whether
Ü Audit Committee executive or non-executive) may be appointed as a
In terms of Section 177(2) of the Companies Act, 2013 member of the Nomination and Remuneration Committee
every listed company and the following class of companies but shall not chair such Committee.
as prescribed under rule 6 of Companies (Meetings of The Nomination and Remuneration Committee is required
Board and its Powers) Rules, 2014, shall constitute an Audit to formulate the criteria for determining qualifications,
Committee. positive attributes and independence of a director and
(i) all public companies with a paid up capital of Rs.10 recommendation of directors, Key Managerial Personnel
Crores or more; and other employees.
(ii) all public companies having turnover of Rs.100 Crores The Board's Report needs to disclose such criteria and also
or more; the policy relating to the remuneration.
Ü Secretarial Audit for Bigger Companies details of equity shares with the differential rights issued
during the year as to dividend, voting rights etc, number of
As per section 204(1) every listed company and other
shares issued, diluted EPS etc.
prescribed companies in Rule 9 Companies (Appointment
& Remuneration of Managerial Personnel) Rules, 2014 • Section 54 read with Rule 8 (13) of Companies (Share
shall annex the secretarial audit report given by a Company Capital and Debentures) Rules, 2014 : Details regarding
Secretary in practice with Board's Report. Board in its issue of sweat equity shares like class of shares issued, class
report shall explain any qualification or other remarks of directors or employees to whom shares issued, diluted
made by the Company Secretary in Practice. Secretarial EPS, reasons for the issue, pricing formula etc. needs to be
audit report given by a Company Secretary shall be in the disclosed
Form no. MR-3.
• Section 62(1)(b) read with Rule 12(9) of the
Companies (Share Capital and Debentures) Rules, 2014 :
DISCLOSURES UNDER VARIOUS RULES Disclose details about Employee Stock Option Scheme if
any issued during the year and other things as given in Rule.
MADE UNDER COMPANIES ACT, 2013
• Proviso to Section 67(3) read with Rule 16(4) of the
Ü Disclosure under Rule 8 of Companies (Accounts) Companies (Share Capital and Debentures) Rules, 2014 :
Rules, 2014 Disclose details of voting rights not exercised directly by the
employees in respect of shares to which the scheme for
The Board's Report should include a statement as per rule 8 provision of money for purchase of or subscription of
of the Companies (Accounts) Rules, 2014 with respect to shares by employees or by trustees for the benefit of
the following matters: employees of the company.
A. Conservation of energy
(i) the steps taken or impact on conservation of energy; Ü Disclosure under Rule 5 of Companies (Appointment
& Remuneration of Managerial Personnel) Rules, 2014
(ii) the steps taken by the company for utilising alternate
sources of energy; • Listed company shall disclose in the Board's Report
(iii) the capital investment on energy conservation ratio of remuneration of each director to median
equipment; remuneration of employees, number of permanent
employees, particulars of employees drawing salary
B. Technology absorption beyond Sixty lakh rupees per annum or five lakhs per
(i) the efforts made towards technology absorption; month as the case may be etc.
(ii) the benefits derived like product improvement, cost
reduction, product development or import Ü Disclosure under Rule 8 of Companies (Corporate
substitution; Social Responsibility) Rules, 2014
(iii) in case of imported technology (imported during the • Section 135(2) of the Act provides that the Board's
last three years reckoned from the beginning of the report should disclose the composition of the Corporate
financial year) - Social Responsibility Committee.
(a) the details of technology imported; • Section 135(5) of the Act further provides that the
(b) the year of import; Board of a company which fulfills the criteria mentioned
(c) whether the technology been fully absorbed; under sub section (1) of the section 135 shall ensure that
(d) if not fully absorbed, areas where absorption has not the company spends in every financial year at least two
taken place, and the reasons thereof; and percent (2%) of the average net profits made during three
(iv) the expenditure incurred on Research and immediately preceding financial years of the company in
Development. pursuance of the CSR Policy formulated by its CSR
Committee. In terms of second proviso to sub section (5) of
C. Foreign exchange earnings and Outgo section 135, if the company fails to spend such amount, the
The Foreign Exchange earned in terms of actual inflows Board shall, in its Report specify the reasons for not
during the year and the Foreign Exchange outgo during the spending the amount.
year in terms of actual outflows.
Ü Additional Disclosures under Companies Act, 2013
• Third proviso to Section 131 (not yet enforced) • Changes in Statutory auditor, Secretarial auditor.
Disclose detailed reasons for revision of financial • Reasons for delay in holding Annual General Meeting,
statement or report of the Board, in the Board's Report in if any.
the relevant financial year in which such revision is being • Appointment of relatives of directors to an office or
made place of profit.
• Special resolutions which were passed by the
Ü Disclosure under Companies (Share Capital and shareholders in the previous meeting(s) but which
Debentures), Rules, 2014 have not been acted upon and the reasons thereof.
• Section 43 read with Rule4(4) of the Companies B Disclosure pursuant to SEBI (Listing Obligations
(Share Capital and Debentures) Rules, 2014 : Disclose the Disclosure Requirements), 2015
ANNUAL REPORT DISCLOSURES [Regulation (34)] § cash flow statement presented only under the indirect
method as prescribed in Accounting Standard-3 or
The listed entity shall submit the annual report to the stock
Indian Accounting Standard 7, as applicable, specified
exchange within twenty one working days of it being
in Section 133 of the Companies Act, 2013 read with
approved and adopted in the annual general meeting as
relevant rules framed thereunder or as specified by
per the provisions of the Companies Act, 2013 which shall
the Institute of Chartered Accountants of India,
contain the following:
whichever is applicable;
§ audited financial statements, i.e., balance sheets,
§ directors report;
profit and loss accounts etc.;
§ management discussion and analysis report - either as
§ consolidated financial statements audited by its
a part of directors report or addition thereto;
statutory auditors;
§ Business Responsibility Reports

BUSINESS RESPONSIBILITY REPORTS

The top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year)
shall submit Business Responsibility Reports describing the initiatives taken by the listed entity from an
environmental, social and governance perspective, in the format as specified.
The listed entities other than top 500 listed companies based on market capitalization and listed entities which
have listed their specified securities on SME Exchange, may include these business responsibility reports on a
voluntary basis in the format as specified.
However those listed entities which have been submitting sustainability reports to overseas regulatory
agencies/stakeholders based on internationally accepted reporting frameworks need not prepare a separate
report for the purpose of these guidelines but only furnish the same to their stakeholders along with the
details of the framework under which their Business Responsibility Report has been prepared and a mapping
of the principles contained in these guidelines to the disclosures made in their sustainability reports.

Disclosures as per SEBI (LoDR) Regulation, 2015

The annual report shall contain any other disclosures specified in Companies Act, 2013 along following additional
disclosures as specified in Schedule V of SEBI (LoDR) Regulation, 2015.

Related Party
Disclosure

Disclosures
with Management
respect to demat Discussion and
or unclaimed
suspense Analysis
account PARTICULARS
OF CHARGES

Corporate
Compliance Governance
Certificate Report

General
Description
of the Property
Charged
A. Related Party Disclosure:
1. The listed entity shall make disclosures in compliance with the Accounting Standard on “Related Party Disclosures”.
2. The disclosure requirements shall be as follows:

Sr. In the accounts of Disclosures of amounts at the year end and the maximum amount of loans/ advances/
No. Investments outstanding during the year
1 Holding Company • Loans and advances in the nature of loans to subsidiaries by name and amount.
• Loans and advances in the nature of loans to associates by name and amount.
• Loans and advances in the nature of loans to firms/companies in which directors are
interested by name and amount.
2 Subsidiary Same disclosures as applicable to the parent company in the accounts of subsidiary company
3 Holding Company Investments by the loanee in the shares of parent company and subsidiary company, when
the company has made a loan or advance in the nature of loan.

For the purpose of above disclosures Directors' Interest shall have the same meaning as given in Section184 of Companies
Act, 2013.
3. The above disclosures shall be applicable to all listed entities except for listed banks.

B. Management Discussion and Analysis: Ü number of meetings of the board of directors held and
dates on which held;
1. This section shall include discussion on the following
Ü disclosure of relationships between directors inter se;
matters within the limits set by the listed entity's
competitive position: Ü number of shares and convertible instruments held by
non-executive directors;
(i) Industry structure and developments.
Ü web link where details of familiarisation programmes
(ii) Opportunities and Threats.
imparted to independent directors is disclosed.
(iii) Segment–wise or product-wise performance.
(3) Audit committee:
(iv) Outlook.
Ü brief description of terms of reference;
(v) Risks and concerns.
Ü composition, name of members and chairperson;
(vi) Internal control systems and their adequacy.
Ü meetings and attendance during the year.
(vii) Discussion on financial performance with respect to
operational performance. (4) Nomination and Remuneration Committee:
(viii) Material developments in Human Resources / Ü brief description of terms of reference;
Industrial Relations front, including number of people Ü composition, name of members and chairperson;
employed.
Ü meeting and attendance during the year;
2. Disclosure of Accounting Treatment: Where in the Ü performance evaluation criteria for independent
preparation of financial statements, a treatment different directors.
from that prescribed in an Accounting Standard has been
followed, the fact shall be disclosed in the financial (5) Remuneration of Directors:
statements, together with the management's explanation Ü all pecuniary relationship or transactions of the non-
as to why it believes such alternative treatment is more executive directors vis-à-vis the listed entity shall be
representative of the true and fair view of the underlying disclosed in the annual report;
business transaction. Ü criteria of making payments to non-executive
directors. alternatively, this may be disseminated on the
C. Corporate Governance Report: listed entity's website and reference drawn thereto in the
The following disclosures shall be made in the section on annual report;
the corporate governance of the annual report. Ü disclosures with respect to remuneration: in addition
to disclosures required under the Companies Act, 2013, the
(1) A brief statement on listed entity's philosophy on
following disclosures shall be made:
code of governance.
i. all elements of remuneration package of individual
(2) Board of directors: directors summarized under major groups, such as
Ü composition and category of directors (e.g., promoter, salary, benefits, bonuses, stock options, pension etc;
executive, non-executive, independent non-executive, ii. details of fixed component and performance linked
nominee director - institution represented and whether as incentives, along with the performance criteria;
lender or as equity investor); iii. service contracts, notice period, severance fees;
Ü attendance of each director at the meeting of the
board of directors and the last annual general meeting; iv. stock option details, if any and whether issued at a
discount as well as the period over which accrued and over
Ü number of other board of directors or committees in
which exercisable.
which a directors is a member or chairperson;
(6) Stakeholders' grievance committee: transactions that may have potential conflict with the
Ü name of non-executive director heading the interests of listed entity at large;
committee; (b) details of non-compliance by the listed entity,
Ü name and designation of compliance officer; penalties, strictures imposed on the listed entity by stock
exchange(s) or the board or any statutory authority, on any
Ü number of shareholders' complaints received so far;
matter related to capital markets, during the last three
Ü number not solved to the satisfaction of shareholders; years;
Ü number of pending complaints. (c) details of establishment of vigil mechanism, whistle
(7) General body meetings: blower policy, and affirmation that no personnel has been
denied access to the audit committee;
Ü location and time, where last three annual general
meetings held; (d) details of compliance with mandatory requirements
Ü whether any special resolutions passed in the previous and adoption of the non-mandatory requirements;
three annual general meetings; (e) web link where policy for determining 'material'
Ü whether any special resolution passed last year subsidiaries is disclosed;
through postal ballot - details of voting pattern; (f) web link where policy on dealing with related party
Ü person who conducted the postal ballot exercise; transactions;
Ü whether any special resolution is proposed to be (g) disclosure of commodity price risks and commodity
hedging activities.
conducted through postal ballot; (11) Non-compliance of any requirement of corporate
Ü procedure for postal ballot. governance report of sub-paras (2) to (10) above, with
reasons thereof shall be disclosed.
(8) Means of communication:
Ü quarterly results; (12) The corporate governance report shall also disclose
Ü newspapers wherein results normally published; the extent to which the discretionary requirements as
specified in Part E of Schedule II have been adopted.
Ü any website, where displayed;
Ü whether it also displays official news releases; and (13) The disclosures of the compliance with corporate
Ü presentations made to institutional investors or to the governance requirements specified in regulation 17 to 27
analysts. and clauses (b) to (i) of sub-regulation (2) of regulation 46
shall be made in the section on corporate governance of
(9) General shareholder information: the annual report.
Ü annual general meeting - date, time and venue;
Ü financial year; D. Declaration signed by the chief executive officer
stating that the members of board of directors and senior
Ü dividend payment date;
management personnel have affirmed compliance with
Ü the name and address of each stock exchange(s) at the code of conduct of board of directors and senior
which the listed entity's securities are listed and a management.
confirmation about payment of annual listing fee to
each of such stock exchange(s); E. Compliance certificate from either the auditors or
Ü stock code; practicing company secretaries regarding compliance of
Ü market price data- high, low during each month in last conditions of corporate governance shall be annexed with
the directors' report.
financial year;
Ü performance in comparison to broad-based indices F. Disclosures with respect to demat suspense account/
such as BSE sensex, CRISIL Index etc. unclaimed suspense account
Ü in case the securities are suspended from trading, the The listed entity shall disclose the following details in its
directors report shall explain the reason thereof; annual report, as long as there are shares in the demat
Ü registrar to an issue and share transfer agents; suspense account or unclaimed suspense account, as
Ü share transfer system; applicable:
Ü distribution of shareholding; • aggregate number of shareholders and the
Ü dematerialization of shares and liquidity; outstanding shares in the suspense account lying at the
Ü outstanding Global Depository Receipts or American beginning of the year;
Depository Receipts or warrants or any convertible • number of shareholders who approached listed entity
instruments, conversion date and likely impact on for transfer of shares from suspense account during
equity; the year;
Ü commodity price risk or foreign exchange risk and • number of shareholders to whom shares were
hedging activities; transferred from suspense account during the year;
Ü plant locations; • aggregate number of shareholders and the
Ü address for correspondence. outstanding shares in the suspense account lying at the
end of the year;
(10) Other Disclosures: • that the voting rights on these shares shall remain
(a) disclosures on materially significant related party frozen till the rightful owner of such shares claims the
 Additional Disclosures under other Acts: Ü Filing of Board's Report

• Certain additional disclosures are required for • The Board's Report has to be attached to the financial
producer companies, Non-Banking Financial statements. The copies of financial statement along
Companies etc. These may be governed by RBI Act, with all documents required to be annexed should be
1934; National Housing Bank Directions. It depends on filed with the Registrar of Companies within 30 days of
the nature of the organization. annual general meeting in Form AOC-4 along with fees
as mentioned in Companies (Registration of office and
• Section 21 - The Sexual Harassment of Women at fees), Rules, 2014.
Workplace (Prevention, Prohibition and Redressal)
Act, 2013] • In the case of listed companies, the full version of the
annual report, including the Board's Report, should be
Every company having more than 10 women employees forwarded to stock exchange as soon as they are issued
shall disclose in annual report following details: through CDFS (Corporate Filing and dissemination
(a) Number of complaints of sexual harassment received System)
in the year Ü Recipients of copies of Financial Statement, Board's
(b) Number of complaints disposed off during the year Report, etc. [ Section 136]
• Every Member of the Company
(c) Number of cases pending for more than ninety days
• Legal representative of any deceased member
(d) Number of workshops or awareness programme • Assignee of an insolvent member
against sexual harassment carried out
• Debenture Trustees
(e) Nature of action taken by the employer or district • Auditor or auditors of the company
officer.
• Directors of the company
Such disclosure shall also be made in the Board's Report as
Ü Penalty for Non-Compliance
good secretarial practice
For violation of any provisions of section 134, the penalty
Ü Signing of Board’s Report shall be

Signing of Board's Report

COMPANY

Punishable with fine of Rs.50,000 which

If Authorised By the Board may extend to Rs.25 lakhs.

Chairperson of the company

OFFICER
If not Authorized by the Board
Every officer of the company who is in default
At least two directors, One
shall be punishable with imprisonment for a
of whom shall be a Managing
term which may extend to 3 years or with fine
Director; if there is no Managing
which shall not be less than Rs.50,000 but
Director then by 2 Directors
such fine may extend to 5 lakhs or with both.

L E A D P A R T N E R I N S T I T U T E S

Ministry of Corporate Affairs

Government of India
ICAI

For more details, log on to www.mca.gov.in