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

Additional Disclosures in the Board's Report

Updated 11 October 2026 · Fact-checked

Additional disclosures are the specific matters section 134(3) requires the Board's Report to cover beyond the state of affairs: board meetings, annual return web address, CSR and risk policies, related party contracts, loans and guarantees, and energy conservation. Answer by listing the clause, the content and the source of the details.

Understand Additional Disclosures in the Board's Report

The Board's Report is the directors' narrative to members. Section 134(3) says what it must include. Some items are the core story, such as the state of the company's affairs, reserves and dividend. Others are the additional disclosures, which cover specific areas of governance and compliance.

Think of the list as a checklist. Each clause points to a topic and, often, to another provision where the details sit. For example, loans, guarantees and investments link to section 186. Related party contracts link to section 188. Independent director declarations link to section 149(6). The exam usually tests whether you know the item, the linked provision and any prescribed form.

Some items are fixed by the Act itself. These include the web address of the annual return (if any), the number of Board meetings, the Directors' Responsibility Statement, and the risk management statement. Others are left to rules. Clause (m), on conservation of energy, technology absorption and foreign exchange earnings and outgo, is to be given in the prescribed manner. Clause (q) covers other matters as may be prescribed. Rules under the Act, including the Companies (Accounts) Rules, 2014, supply those details. Check the rules text if you need exact content.

Two provisos reduce repetition. If a disclosure is already in the financial statements, the Board's Report can refer to it instead of repeating it. If the nomination policy (clause e) or CSR policy (clause o) is on the company's website, it is enough to give its salient features and any change in brief, and to state the web address of the full policy.

The report must be signed by the chairperson if authorised by the Board, or otherwise by at least two directors, one of whom is the managing director, or by the sole director. A signed copy goes out with the financial statements. Default attracts a penalty of ₹3,00,000 on the company and ₹50,000 on every officer in default.

Key rules to remember

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.

How to solve Additional Disclosures in the Board's Report questions

Use this method for any question on what the Board's Report must contain or whether a disclosure is required.

1Identify the matter in the facts, such as a related party contract, a CSR policy or a fraud reported by the auditor.
2Match it to the clause of section 134(3) that covers it.
3Note any linked provision, such as section 186, 188, 149(6) or 143(12), and the prescribed form or rules where relevant.
4Check the provisos: can the company refer to the financial statements, or give salient features with a website address?
5Apply any conditions, for example the evaluation statement in clause (p) applies to listed companies and certain public companies, and the internal financial controls limb of the DRS applies to listed companies.
6Conclude clearly on what must be disclosed and who signs.
7Add the consequence of default under section 134(8) if the question hints at non-compliance.

Quickest way: Clause-by-clause recall

When to use it: When a question asks you to list or test the contents of the Board's Report under time pressure.

Write the headings in order: meetings, annual return, DRS, frauds, independent director declarations, policies, auditor comments, section 186, section 188, affairs, reserves, dividend, material changes, energy, risk, CSR, evaluation, others.
Tag each with its linked section.
Add the two provisos and the signing rule.
Finish with the penalty.

Common mistakes in Additional Disclosures in the Board's Report

Saying the annual return itself must be attached to the Board's Report.
Students confuse the annual return with the web address.
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.
The DRS is memorised as one list.
Fix: Clause (e) of section 134(5) applies in the case of a listed company.
Writing that the full CSR policy must always be reproduced.
The second proviso is forgotten.
Fix: If the policy is on the website, salient features, changes and the web address are enough.
Treating related party contracts as covered by section 186.
Sections 186 and 188 sound alike.
Fix: Section 186 covers loans, guarantees and investments; section 188 covers related party contracts.
Stating the penalty as one amount for everyone.
Students remember only one figure.
Fix: The company pays ₹3,00,000 and each officer in default pays ₹50,000.
Giving the signing rule as any two directors.
Section 134(1) is mixed with 134(6).
Fix: The chairperson signs if authorised; otherwise two directors including a managing director; or the sole director.

Worked examples

Example 1

Sunrise Textiles Limited, an unlisted public company, has a CSR policy published on its website. The draft Board's Report reproduces the entire 12-page policy. Advise whether this is required.

Show the solution

The matter is clause (o) of section 134(3): details of the CSR policy and initiatives taken during the year.
The second proviso says that where the policy is on the website, it is sufficient to specify its salient features and any change in brief and indicate the web address of the full policy.
Therefore reproducing the whole policy is not required.
The initiatives taken during the year must still be reported.

Answer: Reproduction is not required. The report may give the salient features, any changes and the web address, and must report the year's CSR initiatives.

Example 2

During the year, Kaveri Engineering Limited gave a guarantee to a bank for a loan of its associate and also entered into a contract with a company owned by a director's relative. List what the Board's Report must disclose.

Show the solution

The guarantee falls under clause (g): particulars of loans, guarantees or investments under section 186.
The contract with a related party falls under clause (h): particulars of contracts or arrangements with related parties referred to in section 188(1), in the prescribed form.
If these particulars already appear in the financial statements, the first proviso allows reference to them instead of repetition.
The report is signed by the chairperson if authorised by the Board, or otherwise by two directors including a managing director.

Answer: The report must give section 186 particulars of the guarantee and section 188(1) related party particulars in the prescribed form, or refer to the financial statements if already disclosed there.

Exam tips

Learn the clauses of section 134(3) as a list and attach the linked section to each.
Quote the provisos; examiners like them in case answers.
Separate sections 186 and 188 clearly.
State the condition for listed companies where it applies.
Close with the section 134(8) penalty when non-compliance is in the facts.

Practice questions from Board Disclosures and Website Disclosures

Additional Disclosures in the Board's Report in other exams

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

CA IntermediateBoard's Report

Additional Disclosures in the Board's Report: frequently asked questions

Where do the details of energy conservation come from?

Clause (m) of section 134(3) requires conservation of energy, technology absorption and foreign exchange earnings and outgo to be reported in the manner prescribed. Check the rules for the exact content.

Is the risk management statement required for every company?

Clause (n) requires a statement on development and implementation of a risk management policy, including elements of risk that may threaten the company's existence in the Board's opinion. The Act text of clause (n) is not limited by company type.

Who signs the Board's Report?

The chairperson signs if authorised by the Board. Otherwise at least two directors sign, one being a managing director, or the sole director where there is one.

What is the penalty for default under section 134?

The company is liable to a penalty of ₹3,00,000 and every officer in default to ₹50,000.