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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Disclosures and Website Disclosures

Ananya Textiles Ltd, a listed company, closed its books on 31 March. On 20 May, before the Board's report was signed, the company's main plant was damaged by a flood, materially affecting its financial position. Where must this be dealt with in the Board's report?

The flood must be disclosed as a material change affecting financial position occurring between the financial year-end and the date of the Board's report. Section 134(3)(l) expressly covers this period, so a post-year-end event cannot be left out of the report.

  1. AUnder material changes and commitments affecting financial position between the year-end and the date of the reportCorrect
  2. BUnder the Directors' Responsibility Statement only
  3. CUnder the policy on directors' appointment and remuneration
  4. DNowhere, as the event occurred after the financial year ended

Explanation

Section 134(3)(l) requires the Board's report to include material changes and commitments affecting the company's financial position that have occurred between the end of the financial year and the date of the report. The flood is such an event, so ignoring it because it fell after year-end is wrong.

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