CA Mahershi Vijay

Companies Act, 2013 castes a hell lot of responsibilities in the form of numerous disclosures and presentation requirements which has resulted in a lot of complexities to the auditors and Board of Directors of the company. To add further, MCA has been issuing notifications in the form of providing amendments, clarifications etc. and regularly updating oneself with such changes is also an uphill task. With audit season round the corner, we must appraise ourselves with the new reporting requirements. Let me summarize few of them: 

Financial Statements shall consist of –

  1. Balance Sheet
  2. Profit and Loss A/c (or Income and Expenditure A/c)
  3. Cash Flow Statement      [Note 1]
  4. Statement of Changes In Equity (if applicable)     [Note 2]
  5. Explanatory notes attached thereto

Note 1: Cash Flow statements are not required to be prepared by following class of companies-

  • One Person Company
  • Small Companies ( Companies having paid up share capital not exceeding Rs. 50 lacs and turnover not exceeding Rs. 2 crores)
  • Dormant Companies

Note 2: Statement of Changes on Equity is required to be prepared by those companies on which IND AS applies.

Further, following procedure shall be followed regarding authentication of Financial Statements-

  1. In case of Private Company, Financial Statement should be signed by at least 2 directors of the company.
  2. After the signature it should be submitted to the auditor for his report thereon.
  3. Directors who are signing the annual report should be present in the meeting.

Financial statement should be circulated to all of the following-

  1. Every member of the company,
  2. To every trustee of the debenture holder,
  3. To all persons other than as mentioned above, entitled to receive financials like financial institutions, representative nominees etc.

Time period for Circulation of financials-

The financial statements (including consolidated financial statements, if any) auditor’s report, director’s report any every other documents required by law to be annexed or attached to financial statements , which are to be laid before members in the AGM shall be sent “Not Less Than 21 clear days” before the date of the meeting (except in case of meeting on short notice).

I have tried to summarize as concise as possible. In case of any query, you can mail me your queries at For further updates, refer to my upcoming articles.

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October 2020