Board's Report, Abridged Report and Directors' Responsibility Statement (Section 134)

# Board's Report — Content & DRS — Section 134(3), (3A), (4), (5)

## Foundational Principles

• The Board's Report is prepared based on standalone FS (not CFS).
• It must also report the performance of every subsidiary, associate, and joint venture.
• It is annexed to the FS of the company.

## Part A — Standard Content (For All Companies)

Every Board's Report and Abridged Board's Report shall include:

1. Web address where the annual return is placed.

2. Number of BOD meetings.

3. Directors' Responsibility Statement (DRS) [see Part C].

4. Directors appointed or resigned during the year.

5. State of company's affairs.

6. Financial summary or highlights.

7. Material changes affecting financial position between end of FY and date of report.

8. Frauds reported by auditors (other than those reported to CG, which fall under a different reporting channel).

9. Explanation/comments by BOD on any qualification, reservation, adverse remark, or disclaimer by:

• The statutory auditor in his audit report, or
• The Company Secretary in practice in the secretarial audit report.

10. Significant orders passed by regulators, courts, or NCLT that impact the going-concern status of the company.

11. Related Party Transactions under Section 188.

## Part B — Additional Content (Only Standard BOD Report, NOT Abridged)

In addition, the (full) Board's Report must include:

1. Manner of evaluation of performance of BOD and its committees.

• Applicable only to listed companies OR public companies with paid-up capital ≥ ₹ 25 crore as at end of preceding FY.
• Exception: A Government company which has not committed default under Sections 92 & 137 is exempt.

2. Statement of compliance with Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, including:

• (a) Number of complaints received during the year;
• (b) Number of complaints disposed off during the year;
• (c) Number of cases pending for more than 90 days.

3. Statement of compliance with the Maternity Benefit Act, 1961.

4. Amount the BOD recommends as dividend.

5. Other matters prescribed under the Companies Act, 2013 and Rule 8 of Companies (Accounts) Rules, 2014 — such as:

• Change in nature of business;
• Details of deposits (including non-compliant deposits);
• Applicability of cost records;
• Companies that became or ceased to be subsidiary/associate/JV during the year, etc.

## Part C — Directors' Responsibility Statement (DRS) — Section 134(5)

The DRS shall confirm that:

1. The directors have prepared annual accounts on a going-concern basis.

2. Applicable Accounting Standards have been followed for preparation, with proper explanation for material departures.

3. Directors have selected and applied accounting policies consistently and made estimates that are reasonable and prudent to give a true and fair view of state of affairs.

4. Directors have taken proper and sufficient care for maintenance of accounts, safeguarding assets, and preventing and detecting fraud and other irregularities.

5. For listed companies — Directors have laid down internal financial controls and those controls are adequate and operating effectively.

6. Directors have devised proper systems to ensure compliance with applicable laws and that such systems are adequate and operating effectively.

## Penalty for Default in Compliance

## Memory Note — Abridged vs Full Board's Report

• OPC & Small Companies prepare an Abridged Board's Report.
• All other companies prepare the full Board's Report.
• Abridged version contains only Part A items (not Part B additional content).