The Ministry of Corporate Affairs vide a notification dated 22nd October 2019 has published the Companies (Accounts) Amendment Rules, 2019 to further amend the Companies (Accounts) Rules, 2014. This Amendment has inserted a new clause i.e. Rule 8(5) (iiia) which deals with the matters to be included in Board’s report. As per Rule 8(5), every listed company Every listed company at the end of the preceding financial year shall prepare a statement by its Board of directors indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors, the financial summary or highlights, change in the nature of business, the details of directors or key managerial personnel, and the names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year. The new clause inserted by this Amendment requires the companies to add more categories on the said statement or report. These changes shall be effective from 1st December 2019.
As per this amendment, a company is required to include in annual Board report an additional statement confirming the expertise, experience, proficiency, and integrity of the independent directors appointed by the Board during previous year. The independent director’s proficiency shall be determined by the result of the online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs Section 150(1) of the Companies Act 2013.