CS Siddhartha Banik
Unlike Companies Act, 1956, Companies Act, 2013 has provided a mechanism for revision or reopening of financials statement of a Company, even in a situation where it has already been approved by the company at its AGM or circulated to the members or filed with ROC.
Revision or reopening of accounts can be made in the following ways:
A. Voluntary reopen or revision.
B. Compulsory Reopening of financials.
However, in all cases approval of Court or Tribunal of appropriate jurisdiction is required for revision or reopening.
Detail procedure of revision of financials or Boards Reports are given below:
A. Voluntary Reopening/Revision of Financial Statement
What is Voluntary Revision:
Financial Statement or Reports of Directors of a Company may be revised voluntarily at the instances of the company in respect of any of the three preceding financial years.
However, for doing so approval of Tribunal will be required.
Procedure of Voluntary Revision By Board of Directors:
For Revision of the Financials Statements following procedure are to be followed:
1. Board Meeting: The Board of Directors of the company in their meeting shall resolve the voluntary revision of accounts along with the reason and justifications.
2. Petition to the Tribunal: No revision can be made without approval of the Tribunal. Hence, application to the Tribunal shall be made stating the reason or justification of revision.
3. Intimation to the ROC: Once the Tribunal approve the revision, the company shall file a copy of the approval with the ROC.
4. Disclosures in Boards Report: Detailed reasons for revision of such financial statement or report shall also be disclosed in the Board’s report in the relevant financial year in which such revision is being made.
Restrictions of Voluntary Revision/Reopening:
1. No Revision can be made more than once in a year.
2. Where copies of the previous financial statement or report have been sent out to members or delivered to the Registrar or laid before the company in general meeting, the revisions must be confined to —
(a) the revision in respect of the previous financial statement or report must limit to the non-compliance of section 129 or section 134 only; and
(b) the making of any necessary consequential alternation.
3. Revision of Financials Statements or Boards Report of the Previous three years is only allowed.
B. Compulsory Re-opening/Revision.
The financial statement of a Company shall compulsorily be reopened if an order made by an Court or by Tribunal of competent jurisdiction, in reply of an application of the following statutory bodies, either singly or one or more of them together:
a) the Central Government, or
b) the Income-tax authorities, or
c) the Securities and Exchange Board of India (SEBI), or
d) any other statutory regulatory body or authority or
e) any person concerned
Above stated bodies may submit an application to the Tribunal or court of competent jurisdiction in the following situation:
(i) the relevant earlier accounts were prepared in a fraudulent manner; or
(ii) the affairs of the company were mismanaged during the relevant period, casting a doubt on the reliability of financial statemen.