Financial Statement
The financial statements shall give a
true and fair view of the state of affairs of
the company or companies, comply with the accounting standards notified
under section 133 and
shall be in the form or forms as may be provided for different class or classes
of companies in Schedule III:
Comment: Items
contained in such financial statements shall be in accordance with
the accounting standards:
Provided further that nothing
contained in this sub-section shall apply to any insurance or
banking company or any company engaged in the generation or supply of
electricity, or to any other class of company for which
a form of financial statement has been specified in or under
the Act governing such class of company:
Comment: Financial
statements shall not be treated as not disclosing a true and
fair view of the state of affairs of the company, merely by reason of the fact
that they do not disclose -
(a) in the case of an
insurance company, any matters which are not required to be disclosed
by the Insurance Act, 1938, or the Insurance Regulatory and Development Authority
Act, 1999;
(b) in the case of a banking
company, any matters which are not required to be disclosed
by the Banking Regulation Act, 1949;
(c) in the case of a company
engaged in the generation or supply of electricity, any
matters which are not required to be disclosed by the Electricity Act, 2003;
(d) in the case of a company
governed by any other law for the time being in force,
any matters which are not required to be disclosed by that law.
(2) 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.
(3) Where a company has one
or more subsidiaries or associate companies, it shall, in addition to financial
statements provided under sub-section (2), prepare a consolidated financial
statement of the company and of all the subsidiaries and associate companies in
the same form and manner as that of its own and in accordance with applicable
accounting standards, which shall also be laid before the annual general
meeting of the company along with the laying of its financial statement under
sub-section (2):
Provided that the company shall
also attach along with its financial statement, a separate statement containing
the salient features of the financial statement of its subsidiary or
subsidiaries and associate company or companies in such form as may be
prescribed:
Provided further that the Central
Government may provide for the consolidation of accounts of companies in such
manner as may be prescribed.
(4) The provisions of this Act
applicable to the preparation, adoption and audit of the financial
statements of a holding company shall, mutatis mutandis, apply
to the consolidated financial statements referred to in
sub-section (3).
(5) Without prejudice to
sub-section (1), where the financial statements of a company do
not comply with the accounting standards referred to in sub-section (1),
the company shall disclose in its financial
statements, the deviation from the accounting standards, the reasons
for such deviation and the financial effects, if any, arising out of such
deviation.
(6) The Central Government
may, on its own or on an application by a class or classes of companies,
by notification, exempt any class or classes of companies from complying with
any of the requirements of this section
or the rules made thereunder, if it is considered necessary to grant
such exemption in the public interest and any such exemption may be granted
either unconditionally or subject to such
conditions as may be specified in the notification.
(7) If a company contravenes
the provisions of this section,
the managing director, the whole-time
director in charge of finance, the Chief Financial Officer or any other person
charged by the Board with the duty of
complying with the requirements of this section and in the absence
of any of the officers mentioned above, all the directors shall be punishable :
Imprisonment<= 1 Year or
Fine>= 50,000/- rupees but which
may extend to 5,00,000/- rupees, or with both.
Explanation—For
the purposes of this section, except where the context otherwise requires,
any reference to the financial statement shall include any notes annexed to or forming
part of such financial statement, giving information required to be given and
allowed to be given in the form of such notes
under this Act.
DISCLAIMER: THE ARTICLE IS BASED ON
THE RELEVANT PROVISIONS AND AS PER THE INFORMATION EXISTING AT THE TIME OF THE
PREPARATION. IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT AND INDIRECT RESULT
FROM THIS ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING INITIATIVE.
THE AUTHOR – CS DEEPAK
SETH (ASSOCIATE PARTNER HELPINGHANDS PROFESSIONALS LLP) AND CAN BE
REACHED AT CONTACTHHPRO@GMAIL.COM OR 9910248911.
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