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Company Law and Practice · Accounts and Auditors

Board's Report and Authentication of Accounts under Section 134

Updated 11 October 2026 · Fact-checked

The Board's report is a statement by the directors, attached to the financial statements laid before the AGM. Section 134 lists what it must contain, including the Directors' Responsibility Statement, and who signs it. Section 137 then requires the adopted accounts to be filed with the Registrar within thirty days of the AGM.

Understand Board's Report and Authentication of Accounts

Shareholders own the company but do not run it. The directors do. Each year the directors must tell the members how the company did and what they plan to do. The Board's report is that account of stewardship. It sits next to the financial statements and the auditor's report.

Section 134 works in two layers. First, authentication: the Board approves the financial statements, and they are then signed and sent to the auditor for his report. Second, disclosure: the Board's report attached to the statements laid before the general meeting must include the items listed in sub-section (3).

The most examined item is the Directors' Responsibility Statement (DRS) under sub-section (5). It is the directors' own confirmation that accounts were prepared properly, with controls and compliance systems in place. Two points are for listed companies or specific to certain clauses, so read the conditions carefully.

After the AGM adopts the accounts, Section 137 requires filing with the Registrar. The time is thirty days from the date of the AGM. There are special rules for an adjourned AGM, a One Person Company, an AGM not held, and foreign subsidiaries. Default attracts penalties on the company and on named officers.

Think of the topic as four questions: who approves and signs, what goes in the report, who signs the report, and when and how it is filed.

Key rules to remember

Approval and signing of financial statements (S.134(1))
Board approves first, then signing, then submission to auditor
Signed by the chairperson if authorised by the Board, or by two directors (one being the managing director, if any), plus the CEO, CFO and company secretary wherever appointed. In a One Person Company, only one director signs.
Auditor's report (S.134(2))
Auditor's report is attached to every financial statement
It is a mandatory attachment.
Signing of Board's report (S.134(6))
Chairperson (if authorised) OR at least two directors, one being MD OR the sole director
Applies to the Board's report and its annexures.
Circulation (S.134(7))
Signed financial statements + notes + auditor's report + Board's report
A signed copy of the financial statements must go out with all three.
DRS contents (S.134(5))
Clauses (a) to (f): accounting standards, policies and judgments, accounting records, going concern, internal financial controls, compliance systems
Clause (e) on internal financial controls applies to a listed company only. The other clauses apply to every company whose Board's report must contain the DRS. A One Person Company's Board's report is limited by S.134(4) to the Board's explanations on auditor's qualifications, reservations, adverse remarks or disclaimers, so the DRS is not part of it.
Filing with Registrar (S.137(1))
Within 30 days of the date of the AGM
Fees or additional fees as prescribed. A One Person Company files within 180 days from the closure of the financial year.
Where AGM not held (S.137(2))
Within 30 days of the last date by which the AGM should have been held
File with a statement of facts and reasons for not holding the AGM.
Penalty for default in S.134 (S.134(8))
Company ₹3,00,000; every officer in default ₹50,000
Fixed penalties as per the text supplied.
Penalty for late filing (S.137(3))
Company: ₹10,000 + ₹100 for each day the failure continues, maximum ₹2,00,000. Officers: ₹10,000 + ₹100 for each day after the first during which the failure continues, maximum ₹50,000
Officers liable are the MD and CFO; failing them, a director charged by the Board; failing that, all directors.

How to solve Board's Report and Authentication of Accounts questions

Questions on this topic ask you to list contents, apply the signing rule to given facts, or work out filing dates and penalties. Use this order.

  1. 1Identify what is asked: contents of the report, DRS, signing, or filing and penalty.
  2. 2Name the section first: Section 134 for report and signing, Section 137 for filing.
  3. 3For contents, go through sub-section (3) clause by clause and mention the ones relevant to the facts. Do not skip the DRS.
  4. 4For signing, check the type of company (One Person Company or not), whether the chairperson is authorised by the Board, and which officers are appointed.
  5. 5For filing, fix the date of the AGM, add thirty days, and check for special cases: adjourned AGM, AGM not held, One Person Company, foreign subsidiary.
  6. 6For penalty, state the amount for the company and for officers separately, with the continuing default rule if it applies.
  7. 7End with a one-line conclusion answering the exact question asked.

Quickest way: Remember S.134(3) by grouping

When to use it: When you must list Board's report contents quickly in a descriptive answer.

  1. Group 1, governance: number of Board meetings, DRS, independent directors' declaration, nomination and remuneration policy (for a company covered by S.178(1)), annual evaluation of the Board, its Committees and individual directors (only for a listed company and a public company with the prescribed paid-up capital), risk management policy.
  2. Group 2, responses and disclosures: explanations on auditor's and secretarial auditor's qualifications, fraud reported by auditors (not reportable to Central Government), loans, guarantees and investments under S.186, related party contracts under S.188.
  3. Group 3, business: state of affairs, transfer to reserves, dividend recommended, material changes after year end.
  4. Group 4, others: annual return web address, energy conservation and foreign exchange, CSR policy, other prescribed matters.
  5. Write the group name, then list its items, and add the DRS in detail.

Common mistakes in Board's Report and Authentication of Accounts

  • Saying the internal financial controls clause in the DRS applies to every company.

    Students memorise the six clauses together and forget the condition.

    Fix: Write that clause (e) applies in the case of a listed company. Clause (f) on compliance systems has no such condition.

  • Stating that any two directors can sign the financial statements.

    The words 'two directors' are remembered but the rest of the rule is lost.

    Fix: Say the two directors must include the managing director, if any. Also add the CEO, CFO and company secretary wherever appointed.

  • Counting the thirty days from the end of the financial year.

    Confusion with other filing deadlines.

    Fix: Under S.137(1) the thirty days run from the date of the AGM. Only a One Person Company counts 180 days from the close of the financial year.

  • Forgetting the adjourned AGM rule.

    Students learn only the main sub-section.

    Fix: If accounts are not adopted at the AGM, file the unadopted accounts within thirty days, and the Registrar holds them as provisional. File again within thirty days of the adjourned AGM after adoption.

  • Mixing up the penalties under Section 134(8) and Section 137(3).

    Both sections have company and officer penalties.

    Fix: Section 134: ₹3,00,000 on the company and ₹50,000 on each officer in default. Section 137: ₹10,000 plus ₹100 per day, with caps of ₹2,00,000 and ₹50,000.

  • Treating the Board's report of a One Person Company as the full report.

    Students do not read sub-section (4).

    Fix: For a One Person Company the report only needs the Board's explanations on every auditor's qualification, reservation, adverse remark or disclaimer.

Worked examples

Example 1

Delta Textiles Ltd, a listed company, is preparing its Board's report. Its directors ask what the Directors' Responsibility Statement must state. Advise them as per the Companies Act, 2013.

Show the solution
  1. Provision: Section 134(3)(c) requires the Board's report to include the DRS. Section 134(5) sets out its contents.
  2. Clause (a): in preparing the annual accounts, the applicable accounting standards were followed, with proper explanation of material departures.
  3. Clause (b): the directors selected accounting policies and applied them consistently, and made reasonable and prudent judgments and estimates, to give a true and fair view of the state of affairs and the profit or loss for the year.
  4. Clause (c): the directors took proper and sufficient care to maintain adequate accounting records under the Act, to safeguard assets and to prevent and detect fraud and other irregularities.
  5. Clause (d): the annual accounts were prepared on a going concern basis.
  6. Clause (e): because Delta is listed, the directors must state that internal financial controls were laid down and are adequate and operating effectively.
  7. Clause (f): the directors devised proper systems to ensure compliance with all applicable laws, and these systems are adequate and operating effectively.

Answer: The DRS of Delta Textiles Ltd must cover all six clauses (a) to (f) of Section 134(5). Clause (e) applies because the company is listed.

Example 2

Greenfield Pvt Ltd held its AGM on 20 September 2027 and adopted the financial statements. By what date must it file them with the Registrar under Section 137, and what penalty arises if it files 15 days late? Assume the company has a managing director and CFO.

Show the solution
  1. Provision: Section 137(1) requires filing within thirty days of the date of the AGM.
  2. Due date: thirty days after 20 September 2027 is 20 October 2027 (10 days remaining in September plus 20 days in October).
  3. Late by 15 days: filing is on 4 November 2027. The failure continues for 15 days after 20 October.
  4. Penalty on the company under Section 137(3): ₹10,000 plus ₹100 for each day the failure continues. The failure continues for 15 days, so ₹10,000 + (15 × ₹100) = ₹10,000 + ₹1,500 = ₹11,500. This is below the cap of ₹2,00,000.
  5. Penalty on officers: the managing director and CFO are liable. Each is liable to ₹10,000 plus ₹100 for each day after the first during which the failure continues. Of the 15 days, the first day is excluded, leaving 14 days, so ₹10,000 + (14 × ₹100) = ₹10,000 + ₹1,400 = ₹11,400. This is below the cap of ₹50,000.
  6. Check: company 15 days × ₹100 = ₹1,500; officers 14 days × ₹100 = ₹1,400; the difference is the one day excluded for officers.

Answer: Due date is 20 October 2027. For a delay of 15 days, the company is liable to ₹11,500, and the managing director and the CFO are each liable to ₹11,400 under Section 137(3). Additional filing fees as prescribed would also apply.

Exam tips

  • Write the section number before every point. ICSI-style answers earn marks for the provision first.
  • When a question gives facts, such as a listed company or a One Person Company, say how that fact changes the rule.
  • For DRS questions, list all six clauses and note the listed-company condition in clause (e).
  • For penalties, give the company's figure and the officers' figure separately, and mention the cap for continuing default.
  • Do not mix Section 134 with Section 137. Section 134 is about the report and signing. Section 137 is about filing.

Practice questions from Accounts and Auditors

Board's Report and Authentication of Accounts in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Board's Report and Authentication of Accounts: frequently asked questions

What must the Board's report contain under Section 134?

Section 134(3) lists the items. They include the number of Board meetings, the DRS, auditors' and secretarial auditors' qualifications with the Board's comments, loans and guarantees under Section 186, related party contracts, the state of affairs, reserves, dividend, material changes, risk management and CSR policy. Other matters may be prescribed.

Who signs the Board's report?

Under Section 134(6), the chairperson signs if the Board has authorised him. Otherwise at least two directors sign, one of whom must be a managing director. Where there is only one director, that director signs.

Within what time must financial statements be filed with the Registrar?

Under Section 137(1), within thirty days of the date of the AGM. A One Person Company files within 180 days from the closure of the financial year. If the AGM is not held, filing is within thirty days of the last date by which it should have been held.

Is the internal financial controls statement required in every company's DRS?

No. Clause (e) of Section 134(5) applies in the case of a listed company. The other clauses apply to every company whose Board's report must contain the DRS. A One Person Company's report is limited by Section 134(4).