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GUIDANCE OF DRAFTING OF DIRECTORS REPORT / CHECKLIST OF DIRECTORS REPORT

by CS Divesh Goyal
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  Checklist on Board’s Report under The Companies Act, 2013  
S.
No.
Particulars/Disclosure Format, if any Provisions   Applicability  
OPC Small Private Public Select Public Listed
1. Extract of Annual Return
(Extract of annual return relating to FY to which the Board’s Report relates shall be attached.)
MGT 9 No Section for this now.   Removed from Companies Act for all type of Companies.
2. Publication of Annual Return. If Company having website   Section 92(3) read with Rule 8 and 8A and Section 134(3) (a)
3. Number of meetings of the Board, including dates of Board and Committees meetings held indicating the number of Meetings attended by each Director ‐ SS1.
(Clarification by ICSI – SS 1 to apply to BM in respect of which Notices are issued on or after 1stJuly, 2015.)
Format Attached Sec 134 (3) (b);
Secretarial Standards 1
4. Directors’ Responsibility Statement
‐Accounting Standards
‐Accounting Policies
‐ Proper and efficient care for 3 things
‐Going concern basis
‐Adequate Internal Financial Controls
‐Compliance with all applicable laws
6 points Sec 134 (3)( C) &
(5)
5. Company’s policy on Director’s, KMPs
& other employees appointment & remuneration including criteria for determining Qualification, Attributes, Independence, etc.
(For this purpose, limits to be reckoned as existing on the date of Last Audited Financial Statements.)
Sec 134 (3) (e); Sec
178 (1) & (3)
× × × ×
PUSC ≥ 10Cr TO ≥ 100 Cr
OL/deposits/ debentures > 50Cr
6. Explanation or comments by the BoD on every qualification, reservation or adverse remark or disclaimer made bythe Auditors in Audit report Sec 134 (3)(f) (i)
7. Particulars of Loans,  guarantees  or investments u/s 186 Sec 134 (3) (g) × ×
8. Related        Party        Contracts        or arrangements
(Particulars of contract along with justification for entering into such contract)
AOC 2 Sec 134 (3) (h) r/w Rule 8(2) of Cos (Accounts) Rules × ×
9. State of the company’s affairs Sec 134 (3) (i)
10.      9 Amounts  proposed  to  be  carried  to reserves, if any Sec 134 (3) (j) × ×
11.      1 Amount recommended as dividend, if any, Sec 134 (3) (k) × ×
12.      1 Material Changes & Commitments affecting financial position of the Company, occurring after Balance Sheet Date
(Details of material changes occurring between date of Financial Statements & Board Report)
Sec 134 (4) (l)
13.      1 Energy Conservation, Technology absorption, FOREX earnings & outgo, in prescribed manner Sec 134 (3) (m) r/w Rule 8(3) of Cos (Accounts) Rule × ×
14.      1 Statement indicating development & implementation of Risk Management Policy
(This is required only if risk factors are there)
Sec 134 (3) (n) × ×
15.      1 Financial Highlights & Change in the nature of business Sec 134 (3)(q) r/w Rule 8(5) (i)&(ii)of
16.      1 Details         of         Directors/         KMP appointed/resigned during the year Sec 134 (3)(q) r/w Rule (8)(5)(iii) of Cos (Accounts) Rules, 2014 &
Sec168 (1)
17.      1 Name of the companies which have become/ceased to be subsidiaries, JVs or Associate companies during the year Sec 134 (3)(q) r/w Rule (8)(5)(iv) of Cos (Accounts) Rules, 2014 × ×
18.      1 Details of significant and material orders passed by the regulators, courts, tribunals impacting the going concern status and company’s operations in future Sec 134 (3)(q) r/w Rule 8 (5) (vii) of Cos (Accounts) Rules
19.      1 Details in respect of adequacy of internal financial controls with reference to Financial Statements Sec 134 (3)(q) r/w Rule 8 (5) (viii) of Cos (Accounts) Rules × ×
20.      1 Separate section containing a report on performance and financial position of each of subsidiaries,  associates  & JVs included in the Consolidated FS of the Co Rule 8(1) of Cos (Accounts) Rules × ×
21.      2 Disclosures under Sexual Harassment of Women at Workplace (Prevention, prohibition & redressal) Act, 2013 Sexual Harassment of Women at Workplace (Prevention, prohibition & redressal) Act, 2013
22. 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; Section 143(12) read with Rule 8A and Section 134 (3) (CA)
23. Compliance with Secretarial Standard As per Secretarial Standard issued u/s 188            
EVENT BASED/LIMIT BASED DISCLOSURES
24.      21 Details about CSR Committee, Policy, its implementation and  initiatives taken during the year
(To be included if following limits are triggered –
NW ≥ 500Cr TO ≥ 1000 Cr
NP≥ 5 Cr)
Format prescribed in CSR
Rules
Sec 134 (o); 135
(2) r/w Rule 8 of Cos (CSR) Rules
25.      2 Disclosure  on  establishment  of  Vigil Mechanism (Applicable to Cos which have accepted deposits from the public or borrowed money from banks & FIs in excess of Rs 50 Cr) Sec 177(9) r/w Rule 7 of Cos (Meetings of the BoD) Rules
26.      23 Prescribed details of deposits covered under Chapter V of the Act Sec 134 (3)(q) r/w Rule (8)(5)(v) & (vi) of Cos (Accounts) Rules, 2014 × ×
27.      24 Issue of Equity Shares with Differential Rights, Sweat Equity, ESOS, etc.
(This  disclosure  would  be  event based)
Sec 43, 54 r/w Rule
4 (4); 8 (13) & 12
(9) of Cos & Sec 62 (1)(b) r/w rule 12(9) of Cos(Share Cap & Debenture) Rules
28.      25 Disclosure in respect of voting rights not exercised directly by the employees in respect of shares to which the scheme relates Sec 67(3) r/w Rule 16 of Cos(Share Cap & Debenture) Rules
DISCLOSURE MANDATORY TO BE MADE BY PUBLIC COMPANY

 
29.      2 Disclosure about receipt of any commission by MD / WTD from a Company and also receiving commission / remuneration from it Holding or subsidiary Section 197(14) × × ×
DISCLOSURE MANDATORY TO BE MADE BY LISTED COMPANY & SELECTED PUBLIC COMPANY

 
30.      27 Declaration by Independent Directors Sec 134 (3)( d) r/w
Sec 149 (6)
× × × ×
PUSC ≥ 10Cr TO ≥ 100 Cr
OL/deposits/ debentures > 50Cr
31.      28 Disclosure on    Reappointment    of Independent Director
(ID is eligible for re‐appointment beyond a term of 5 yrs by passing an SR and if re‐appointed, the company must disclose such re‐ appointment of ID in Board Report.)
Section 149(10) × × × ×
PUSC ≥ 10Cr TO ≥ 100 Cr
OL/deposits/ debentures > 50Cr
32.      29 Secretarial Audit Report
(To be annexed with Board’s Report)
MR 3 Sec 204 (1) × × × ×
PUSC ≥ 50Cr TO ≥ 250 Cr
33.      30 Explanation or comments by the BoD on every qualification, reservation or adverse remark or disclaimer made by the PCS in Secretarial Audit report Sec 134 (3)(f) (ii) × × × ×
PUSC ≥ 50Cr TO ≥ 250 Cr
34.      31 Manner in which Formal Annual Evaluation of performance  of Board, its Committees and  individual directors has been carried out Sec 134 (p) r/w Rule 8 (4) of Cos (Accounts) Rules × × × ×
PUSC ≥ 25 Cr
35.      32 The composition of the Audit Committee
Further, if the Board has not accepted any recommendation of the Audit Committee, the same shall also be disclosed along with reasons therefore.
Sec 177 (8) r/w
Rule 6 of Cos(Meetings of the BoD) Rules
× × × ×
PUSC ≥ 10Cr TO ≥ 100 Cr
OL/deposits/ debentures > 50Cr
36.      3 Corporate     Governance     disclosure requirements Clause 49 of the Listing Agreement × × × × ×
DISCLOSURE MANDATORY TO BE MADE BY LISTED COMPANY

 
37.      3 Ratio of remuneration of each director to        the        median        employee’s Section 197(12) r/w Rule 5 of × × × × ×
38.      3 remuneration and  other  prescribed details   Companies (Appointment & Remuneration of Managerial Personnel) Rules × × ×
39. Voluntary revision of financial statements or Board’s report

 

Sec 131 (1)

 

 

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).

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