Board Disclosures and Website Disclosures: formula sheet

Key formulas

Approval and signing of financial statements

Board approves first; then signed by chairperson (if authorised) OR two directors (one being MD, if any), plus CEO, CFO and CS where appointed

Section 134(1). In a One Person Company, only one director signs. Signing is for submission to the auditor for the report.

Signing of Board's report

Chairperson (if authorised by the Board) OR at least two directors, one being MD; where there is one director, that director

Section 134(6). It applies to the report and its annexures.

Auditor's report

Attached to every financial statement

Section 134(2).

Contents of the Board's report

Section 134(3), clauses (a) to (q)

Includes annual return web address, number of Board meetings, DRS, independent directors' declaration, auditor and secretarial audit remarks, section 186 and 188 particulars, state of affairs, reserves, dividend, material changes, risk policy, CSR policy, Board evaluation and prescribed matters.

Directors' Responsibility Statement

Section 134(5)(a) to (f): accounting standards; policies and prudent judgments; accounting records; going concern; internal financial controls (listed companies); compliance systems

Clause (e) on internal financial controls applies to listed companies only. Clauses (a), (b), (c), (d) and (f) apply to all companies.

Board evaluation statement

Listed companies and prescribed public companies must state how formal annual evaluation of the Board, its committees and individual directors was made

Section 134(3)(p).

Circulation

Signed financial statements go out with notes, auditor's report and Board's report

Section 134(7).

Penalty

Company: ₹3,00,000. Every officer in default: ₹50,000

Section 134(8).

One Person Company report

Report means explanations or comments on every auditor qualification, reservation, adverse remark or disclaimer

Section 134(4). Section 134(3A) allows an abridged report for OPC or small company as prescribed.

Approval and signing (s.134(1))

Board approval → signing on behalf of the Board → submission to auditor

Approval must come before signing. The statement includes the consolidated financial statement, if any.

Who signs: directors

Chairperson (if authorised by the Board) OR two directors, one of whom is the managing director, if any

The chairperson can sign alone only when the Board has authorised him.

Who signs: officers

CEO + CFO + company secretary, wherever appointed

They sign along with the directors. If a post is not filled, that signature is not required.

One Person Company

Only one director signs

No officer signatures are listed for a One Person Company.

Auditor's report (s.134(2))

Auditor's report attached to every financial statement

No exception for any class of company.

Circulation (s.134(7))

Signed financial statement + notes + auditor's report + Board's report

All four go together when the statement is issued, circulated or published.

Penalty (s.134(8))

Company: ₹3,00,000; every officer in default: ₹50,000

This is a penalty, not imprisonment.

Number of Board meetings

Section 134(3)(b)

Report the number of meetings of the Board held during the year.

Annual return web address

Section 134(3)(a) read with section 92(3)

Give the web address where the annual return has been placed, if any.

Risk management statement

Section 134(3)(n)

State how a risk management policy was developed and implemented, and name any risk elements the Board thinks may threaten the company's existence.

CSR policy

Section 134(3)(o)

Give details of the CSR policy and the initiatives taken during the year.

Related party contracts

Section 134(3)(h) read with section 188(1)

Give particulars of contracts or arrangements with related parties in the prescribed form.

Loans, guarantees, investments

Section 134(3)(g) read with section 186

Give particulars of loans, guarantees or investments under section 186.

Energy, technology, foreign exchange

Section 134(3)(m)

Conservation of energy, technology absorption, foreign exchange earnings and outgo, in the prescribed manner.

Other linked items

Clauses (ca), (d), (e), (f), (p)

Frauds reported by auditors under section 143(12) other than those reportable to the Central Government, independent directors' declarations, nomination and remuneration policy, comments on auditor and secretarial audit qualifications, and the annual evaluation statement.

Provisos

Disclosures in financial statements may be referred to; clause (e) and (o) policies on website need only salient features and web address

Use these to shorten the report without losing compliance.

Penalty

Section 134(8): company ₹3,00,000; each officer in default ₹50,000

Applies to default in complying with section 134.

Annual return link in Board's report

Section 134(3)(a): Board's report includes the web address, if any, where the annual return under section 92(3) is placed

Give the web address. You do not need to attach the full annual return.

Policy on website: shortcut for the Board's report

Second proviso to section 134(3): policy under clause (e) or (o) on website → brief salient features + changes + web address

Clause (e) is the nomination and remuneration policy. Clause (o) is the CSR policy.

Avoid repeating disclosures

First proviso to section 134(3): disclosures already in the financial statements are referred to, not repeated

This is about cross-reference. It is different from the website rule.

Penalty for default under section 134

Section 134(8): company ₹3,00,000; every officer in default ₹50,000

This applies to non-compliance with section 134, including a missing web address in the Board's report.

Subsidiary accounts on website

Company with a subsidiary and a website → separate audited financial statements of each subsidiary on the website

State this rule without a section number unless you are certain of it.

Penalty under Section 134(8)

Company: ₹3,00,000. Every officer in default: ₹50,000

Applies to any default in complying with Section 134, including approval, signing, Board's report contents and circulation.

Reduced penalty under Section 446B

Lower of (½ × penalty specified) and the cap: company ≤ ₹2,00,000; officer in default or other person ≤ ₹1,00,000

Applies to One Person Company, small company, start-up company and Producer Company. For Section 134(8): company ₹1,50,000, officer ₹25,000.

Adjudication under Section 454

Adjudicating officer (not below Registrar) → order after hearing → appeal to Regional Director within 60 days

The adjudicating officer may also direct rectification of the default.

Non-compliance with the order (Section 454(8))

Not complied within 90 days of receipt: Company fine ₹25,000 to ₹5,00,000. Officer: imprisonment up to 6 months or fine ₹25,000 to ₹1,00,000, or both

This is the stage at which imprisonment can arise.

Who signs the Board's report (Section 134(6))

Chairperson if authorised by the Board; otherwise at least two directors, one being managing director; or the sole director

Wrong signatory is a default that attracts Section 134(8).

Quick revision

• The financial statement is approved by the Board, then signed, and sent to the auditor for his report.
• Signing: the chairperson if authorised by the Board, or two directors (one the managing director, if any), plus the CEO, CFO and company secretary where appointed. A One Person Company needs only one director.
• The auditor's report is attached to every financial statement.
• The Board's report is attached to statements laid before the company in general meeting.
• The Board's report must state the number of Board meetings and include the Directors' Responsibility Statement.
• The Board must explain every qualification, reservation, adverse remark or disclaimer by the auditor and by the company secretary in practice in the secretarial audit report.
• The report must cover risk management policy, CSR policy initiatives and, for listed and prescribed public companies, the annual evaluation of the Board, its Committees and individual directors.
• The Directors' Responsibility Statement covers accounting standards, policies and estimates, accounting records, going concern, internal financial controls (listed company) and compliance systems.
• Disclosures already in the financial statements can be referred to instead of repeated.
• For the policies under clause (e) or (o), brief salient features plus the web address are enough if the policy is on the company's website.
• The Board's report is signed by the chairperson if authorised, otherwise by at least two directors, one being a managing director; a one-director company is signed by that director.
• Default: the company is liable to a penalty of ₹3,00,000 and every officer in default to ₹50,000.

Common mistakes

• Saying the internal financial controls clause of the DRS applies to all companies. Fix: Clause (e) applies only to a listed company. The other clauses apply to every company.
• Saying the Board's report is signed by any two directors. Fix: Under 134(6), the chairperson signs if authorised by the Board. Otherwise at least two directors sign, one being a managing director. A company with one director is signed by that director.
• Saying any two directors can sign. Fix: Write that one of the two must be the managing director, if the company has one.
• Saying the chairperson can always sign alone. Fix: The chairperson signs only if authorised by the Board. Mention the authorisation every time.
• Saying the annual return itself must be attached to the Board's Report. Fix: The clause asks for the web address where the annual return has been placed, if any.
• Applying the internal financial controls limb of the DRS to all companies. Fix: Clause (e) of section 134(5) applies in the case of a listed company.
• Saying the full policy must be reproduced in the Board's report even when it is on the website. Fix: Write that brief salient features, changes and the web address are enough if the complete policy is on the website.
• Forgetting to mention the web address of the annual return. Fix: Quote section 134(3)(a): the Board's report includes the web address, if any, where the annual return under section 92(3) is placed.
• Stating that Section 134(8) carries imprisonment for the officer in default. Fix: Say Section 134(8) is a monetary penalty. Imprisonment arises only under Section 454(8) for failing to comply with the order for 90 days.
• Writing the penalty as a fine range such as ₹50,000 to ₹25,00,000. Fix: Remember the fixed amounts: ₹3,00,000 for the company and ₹50,000 for every officer in default.

Exam tips

• Write the sub-section number with each point, such as 134(3)(f) or 134(5)(e). It shows precision.
• For a DRS question, list all six points and flag that clause (e) is for listed companies only.
• In case questions, first state the company type. Many answers turn on listed versus unlisted.
• Link the report to ESG themes: risk policy, CSR policy and Board evaluation show how the Board reports on sustainability and governance.
• End every answer with the consequence: penalty under 134(8) or the corrective step.
• Write the sequence in one line: approval by the Board, signing, then submission to the auditor.
• Quote the exact signing condition: chairperson if authorised, otherwise two directors with one MD.
• Always apply the facts: name the persons and state whether each signature is needed.