Cameron Manufacturing (India) Private Limited Vs Regional Director (NCLT Chennai)
NCLT Permits Financial Statement Revision Because Accounting Errors Were Inadvertent; Revision of Financial Statements Allowed Because Misclassifications Did Not Alter Financial Position; NCLT Approves Revised Financial Statements Because Corrections Were Needed for True and Fair View; Financial Statement Revision Allowed Because Section 131 Covers Inadvertent Accounting Misclassifications; NCLT Rejects Objections to Revision Because Section 131 Enables Correction of Adopted Financial Statements.
The National Company Law Tribunal (NCLT), Chennai, allowed an application under Section 131 of the Companies Act, 2013, permitting the petitioner company to revise its financial statements for FY 2019-20 after finding that certain entries had been inadvertently misclassified and required correction to present a true and fair view of the company’s financial position.
The petitioner stated that during FY 2019-20 it had advanced an Inter Corporate Deposit (ICD) of ₹30 crore to its related party, Schlumberger Solutions Private Limited (SSPL), of which ₹16,00,12,514 had been repaid, leaving an outstanding balance of ₹13,99,87,486 as on 31 March 2020. The company submitted that this outstanding ICD had been mistakenly classified as “Trade Receivables” instead of “Short-Term Loans and Advances.” Interest income of ₹1,48,17,808 earned on the ICD had also been incorrectly shown as “Interest Income on Bank Deposits,” while the ICD balance had been reflected under Cash Flow from Operating Activities instead of Cash Flow from Investing Activities. The company further stated that the related party disclosures omitted details of the ICD and interest income and that the disclosure required under Section 186(4) had been inadvertently omitted. According to the petitioner, these errors were clerical, unintentional, and noticed after the financial statements had been approved by the shareholders but before filing with the Registrar of Companies.
