India has signed MoUs with 23 countries for cooperation on Digital Public Infrastructure (See 'Corp Brief') Railways inspects All Bridges Twice a Year (See 'Corp Brief') Over 1.25 lakh Livestock Farmers joined Virtual Awareness Program: MoS (See 'Corp Brief') Pariksha Pe Charcha marks First-Ever multi-location nationwide engagement (See 'Corp Brief') TRAI issues Telecommunication Services Interconnection Regulations, 2026 (See 'Corp Brief') Govt accelerates 5G rollout through Spectrum Auctions (See 'Corp Brief') A&C - Once arbitral tribunal has adopted plausible & reasonable interpretation of facts and contractual terms, courts cannot re-appreciate evidence or sit in appeal over award: SC (See 'Legal Desk') Anusandhan Foundation sets Course for India's Innovation-led Journey to 2047 (See 'Corp Brief') A&C - Permitting a civil suit to challenge an award confirmed by the Supreme Court would undermine the arbitral framework and public confidence in arbitration: HC (See 'Legal Desk') MoS unveils First TDB Window to fund High-Risk Technology Commercialisation (See 'Corp Brief') NMDC records Highest-Ever Production, Sales and Financial Performance (See 'Corp Brief') DoT is actively promoting digital safety and preventing telecom-related frauds: MoS (See 'Corp Brief') A & C - Referral court not required to conduct detailed or contested inquiry & must limit itself to ascertaining whether underlying contract contains an arbitration clause covering disputes between the parties: HC (See 'Legal Desk') IICA organises Training Program on Companies Act, Competition Law & IBC (See 'Corp Brief') DCPC organises Job Fair in collaboration with AIPMA (See 'Corp Brief') SEBI - If Noticee violated regulation 23(1) and 23(4) of LODR Regulations as alleged in SCN, Noticee is liable for payment of monetary penalty in terms of section 15HB of SEBI Act: SEBI (See 'Legal Desk') SAIL records highest-ever January '26 performance (See 'Corp Brief') Paradip Port Authority wins First Prize at Swachhata Pakhwada (See 'Corp Brief') Atal Innovation Mission hosts Flagship Conclave for National Incubation Ecosystem (See 'Corp Brief') Trade Marks - Procedural defects & inadvertent errors which are curable should not be permitted to defeat substantive rights, unless shown to be deliberate, mala fide, or prejudicial to opposite party: HC (See 'Legal Desk') CCI approves subscription to 15.01% equity of Ambit Wealth by Daiwa International (See 'Corp Brief') India, Bhutan to strengthen Cooperation in Power Sector (See 'Corp Brief') CCI okays AXDI LDII SPV to acquire shares of Aadhar Housing Finance (See 'Corp Brief') PMLA - Unless resolution is approved by NCLT, matter under PMLA for attachment of property may proceed even against corporate debtor: SAFEMA (See 'Legal Desk') SAIL, RITES sign MoU for diesel locomotive leasing and maintenance (See 'Corp Brief') Paswan calls for countering Misinformation on Processed Foods (See 'Corp Brief') Misc - If public authority holds any information in form of data, statistics, abstracts, etc. an applicant can have access to same under RTI Act subject to exemptions u/s 8: IBBI (See 'Legal Desk') Horticulture output reaches 367.72 million tonnes in 2024–25: Chouhan (See 'Corp Brief') SEBI - Contention of Noticees cannot be accepted as ground to seek exoneration qua their liability regarding failure to comply with regulatory limits: SEBI (See 'Legal Desk') HLC on banking to align financial sector growth to Viksit Bharat (See 'Corp Brief') Infra Risk Guarantee Fund to instil confidence in private developers (See 'Corp Brief') Shares buyback to be taxed as capital gains for all categories of shareholders (See 'Corp Brief') IIFT achieves 1st Position in Times B-School Ranking 2026 (See 'Corp Brief') Centre to enable States to establish regional medical hubs for tourism (See 'Corp Brief') Budget lays emphasis on scaling up manufacturing in 7 strategic sectors (See 'Corp Brief') Competition Act - intervention of CCI not warranted where allegations contained in Information are vague, sweeping & unsupported by material particulars necessary to establish contravention of Sections 3 or 4 of the Act: CCI (See 'Legal Desk') Interest accrued on motor accident compensation will no longer attract TDS (See 'Corp Brief') FM proposes uniform MAT Treatment for non-resident opting for Presumptive Tax (See 'Corp Brief') Tax certainty for non-resident individuals (See 'Corp Brief') Govt. revised criteria for Inter-Group loan exclusion from 'Dividend' definition (See 'Corp Brief') FDI Limit in Insurance Sector raised to 100%, subject to full domestic investment of premiums (See 'Corp Brief') Govt to facilitate ICAI, ICSI, ICMAI to run short-term know-how courses for youth (See 'Corp Brief') Government to set up 'BharatTradeNet' as Unified Digital Platform for international trade (See 'Corp Brief') Sovereign Gold Bond Capital Gains exemption to apply only to original holders at maturity (See 'Corp Brief') CSIR-NIO's Vizag Centre to play key role in offshore energy: MoS (See 'Corp Brief') FEMA - Statement recorded u/s 37 of FEMA did not amount to confession of criminal offence: HC (See 'Legal Desk') International Olympic Academy Director impressed by India's vision for sports (See 'Corp Brief') WB ranks India among top 5 in terms of private investment in infra (See 'Corp Brief') SEBI - In absence of explicit permission/exemption with respect to RFQ requirements, Noticee should have suspended its services if it was not feasible to engage large amounts of funds into working capital: SEBI (See 'Legal Desk') Survey: India should focus on application-based AI tools (See 'Corp Brief') IBC - NCLT can't decide title disputes over assets, including IPRs such as trademarks, unless they have direct & proximate nexus with insolvency resolution process: SC (See 'Legal Desk') UNCTAD ranks India as leading economy in trade partner diversification (See 'Corp Brief') The Securities Markets Code, 2025: Strengthened Enforcement, Weakened Accountability? (See 'CORP EINSICHT')

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Board to Report what's Right what's Not

Published: Aug 29, 2025

 

By CS Shweta Jain, PCS Partner, Agarwal S. & Associates, New Delhi

Introduction

COMPANY is an association of persons who mutually decided to put their funds into any venture or business and hand over their funds to a team of intelligent and experienced persons who run the business on behalf of its owners and this team is called the "BOARD OF DIRECTORS."

Companies are governed by the Companies Act, 2013. The Company, by virtue of law, is considered a separate legal entity that is separate from its owners. There are many stakeholders of a company like shareholders, employees, vendors, etc. Shareholders and other outside stakeholders are not involved in day-to-day affairs of the company, but since public funds are invested in the company, it becomes important that those who are involved in day-to-day business of the company submit their performance report and current financial status of the company to shareholders and other stakeholders periodically.

Keeping this centric thought, Companies Act, 2013 under section 134 read with Rule 8 and 8A of the Companies (Accounts) Rules, 2014 provides for preparation and submission of Board's Report every year in Annual General Meeting of the Company.

Board's Report is a very crucial document in the Annual Report of any Company. Law mandates the disclosure of certain data and facts in this report by the Board, so that stakeholders can get a clear picture of the status and performance of the company during any financial year. To make Board's Report a very authenticated document, law mandates that it has to be signed either by the chairperson of the Company or by at least two Directors, one of whom shall be a managing director, or by the director where there is only one director.

In this Article, we will cover numerous areas on which a Board's Report must throw light and give a factual position. Apart from the mandatory information, the Board can provide any other information as well, which it thinks must be part of the Report.

Areas Covered under Board's Report

1. Financial Results & State of Affairs & Operations are disclosed in Board's Report. The Company's financial performance for the year under review along with previous year's figures like Revenue from operations, other income, details of various expenses, earnings per share, etc. are provided in the Board's Report.

2. Highlights of Performance of Subsidiaries, Associates, and Joint Venture Companies and their Contribution to overall Performance of the Company during the period under report.

3. Details of dividend recommendations for the financial year under review and details of the amount transferred to reserves are provided.

4. Information about any change in nature of business during the relevant financial Year.

5. Any changes in the Capital Structure of the Company during the year include Changes in subscribed, issued, paid-up share capital, authorized share capital, reclassifications or subdivisions or reduction of share capital during the year under review. Also, any information relating to buyback of shares or restructuring of capital during the year under review.

6. Details of transfer and transmission of securities and issue of Equity Shares with Differential Rights during the year under review. Details of the issue of Sweat Equity Shares and the issue of shares under Employee stock options. Details of the issue of debentures, bonds, or any non-convertible securities during the year under review.

7. The Annual Return should be available on the Company's website, and the link to the same should be disclosed in the Board's Report. Details of Board Meetings held during the year, like dates, place, and attendance of Directors in such meetings, should be disclosed. Name, designation, date of appointment, etc. of directors and key managerial personnel of the Company should be disclosed.

8. Details of changes in the composition of the Board of Directors and other key managerial personnel. Details of the Annual General Meeting and Extra Ordinary General Meeting held during the relevant financial year should be disclosed. Details such as composition, number of meetings held during the year of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, and CSR Committee.

9. Directors' Responsibility Statements is part of Board's Report wherein it is confirmed by Directors that in the preparation of the Annual Accounts, the applicable accounting standards have been followed, that the Directors had selected appropriate accounting policies, applied them consistently, and made judgments and estimates that are reasonable, that the Directors had prepared the Annual Accounts on a going concern basis, that the Directors had laid down internal financial controls to be followed by the Company and the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws effectively.

10. It has to be confirmed whether during the year all the Independent Directors have met the requirements specified under Section 149(6) of the Companies Act, 2013 for holding the position of 'Independent Director' and the necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013 was received.

11. The Management's comments are required on every observation in the Statutory Auditors Report. The "Secretarial Audit Report" from the secretarial auditor forms part of this report. Details of loans, investments, guarantees, and securities during the year under review are provided in the Board's Report.

12. Information for conservation of Energy, Technology Absorption & Foreign Exchange Earnings And Outgo are to given in prescribed format of law.

13. The particulars of contracts or arrangements with related parties are to be given in prescribed format of law. The explanation about any material changes and commitments, which affect the financial position of the company are captured in Report.

14. Risk Management is the process of identification, assessment, and prioritization of risks followed by coordinated efforts to minimize, monitor, and mitigate the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Brief highlights of the Risk management policy of the company are to be mentioned.

15. The principles of Corporate Social Responsibility (CSR) are deeply imbibed in the Company's corporate culture. The details of the members of the CSR Committee and the details of the meeting of the CSR Committee along with their attendance held during the year are given in the Board Report.

16. Details of the deposits raised and details of any significant and material orders passed by the regulators / court / tribunal during the financial year against the company, which impacts the going concern status and company's operations in future.

17. Information about internal financial controls with reference to financial statements.

18. Details of Cost Auditor and Cost Records

19. The information pertaining to the vigil mechanism for reporting genuine concerns through the Company's Whistle-Blower Policy.

20. Details of the application made or proceedings pending under the Insolvency and Bankruptcy Code by the Company. Details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the banks or financial institutions, along with the reasons thereof.

21. During the year under review, there has been no one-time settlement of loans taken from banks and financial institutions.

22. Brief details about insurance done to secure assets of the Company and information about significant and material orders passed by the Regulators, Courts, or Tribunals. The Company has to disclose the names and other particulars of employees who get salaries more than a certain prescribed limit.

23. The total number of employees as of the closure of the financial year with further bifurcation into Female, Male, and Transgender. The Company needs to give certain information and factual data under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

24. The Directors recommend for approval of the Members the appointments/reappointment of the Directors as proposed in the Notice to the AGM.

25. The Directors need to confirm that the company is complying with all applicable laws and the applicable provisions of the Secretarial Standards (SS-1 and SS-2) relating to 'Meetings of the Board of Directors' and 'General Meetings' issued by the ICSI.

26. The main annexures to the Board's Report are as follows:

- Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgo in prescribed format under law

- Annual Report on Corporate Social Responsibility (CSR) activities for FY 2024 -25 in prescribed format under law

- Disclosure of Related Party Transactions in prescribed Form AOC -2

- Disclosure as per requirements of Section 197 of the Companies Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Conclusion

From the above insight of the Board's Report, it is not difficult to understand its importance and value. It is a crucial document for every company. The law makes it mandatory for every company to give complete and factually correct information in this report. If a company is in default in complying with the law, then Section 134 of the Companies Act states that the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.

[The views expressed are strictly personal.]

 

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