Summary:- The term “financial statement” includes: Balance sheet, Profit and loss statement, Cash flow statement, Share holding pattern At every annual general meeting of a company, the Board of Directors of the company shall lay before such meeting financial statements for the financial year. Along with its standalone financial statement, a company is also required to prepare the consolidated financial statements of its subsidiary and associate companies . all provisions applicable on standalone financial statement shall mutis-muta dis applicable on consolidated financial statement as well .The Central Government has the power to exempt any company from the applicability of Section 129 of Companies Act, 2013. The format for preparing financial statements is prescribed under Schedule III of the act Financial statements must provide a true and fair view of the company’s financial position and performance.
Section 129(1):- A company’s financial statements must provide a true and fair view of its financial position and performance. The format of the financial statements is prescribed under Schedule III of the Companies Act, 2013. While preparing the financial statements, companies are required to follow the applicable Accounting Standards.
Exemptions: Section 129(1) does not apply to the following companies:
- Insurance companies
- Banking companies
- Electricity companies
If a company is unable to comply with the applicable accounting standards, it must disclose:
1. The reasons for such deviation.
2. The financial impact of the deviation.
Q.1 Responsibility for Preparing Financial Statements?
- Managing Director (MD)
- Whole-Time Director (WTD)
- Chief Financial Officer (CFO)
- Any person authorized by the Board of Directors (BOD).
Non-Compliance Penalty:
Fine:
- Minimum: ₹50,000
- Maximum: ₹5,00,000
- Imprisonment: Up to 1 year.
- Both fine and imprisonment may also be imposed.
Q.2 who will signed the financial statement ? Sec134(1)
The financial statements shall be signed by the Chairperson if he is authorized by the BOD along with the CEO, CFO, CS, if any of them are appointed in the company.
If the Chairperson is not authorized, then any two directors shall sign, one of whom must be the Managing Director, if any, along with the CEO, CFO, CS, if any of them are appointed in the company.
Filing of Financial Statements
The financial statement must be filed with the Registrar of Companies (ROC) within 30 days of the Annual General Meeting (AGM) using Form AOC-4.
Q.3 If the company did not hold the AGM?
The financial statements (FS) must be filed with the Registrar of Companies (ROC) within 30 days from the last date by which the AGM was required to be held.
Q.4 If the company held the AGM but the shareholders did no approve the financial statements?
File the unadopted financial statements with the Registrar of Companies (ROC) within 30 days of the AGM.
Call another AGM to get the financial statements approved by the shareholders.After approval, file the adopted financial statements with the ROC within 30 days of the second AGM.
Section 136
Circulation of Financial statement:-
1. Notice of AGM must be sent to:
- Members
- Directors
- Auditors
- Debenture Trustees (if applicable)
2. Can the company send a shorter notice for the AGM?
Yes, the company can send a shorter notice provided that:
The majority of the members agree, and Members holding at least 95% of the voting rights consent to the shorter notice.
Source :- companies act 2013
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