What are provisions relating to financial statements under the New companies act 2013 1. Section 129 of companies act 2013, provides for preparation of financial statements. 2. 2(40) to include balance sheet, profit and loss account/income and expenditure account, cash flow statement, statement of changes in equity and any explanatory note annexed to the above. 3. New section 129 corresponds to existing section 210. It provides that the financial statements shall give a true and fair view of the state of affairs of the company and shall comply with the accounting standards notified under new section 133. 4. It is also provided that the financial statements shall be prepared in the form provided in new schedule III of Companies Act, 2013. 5. It may be noted that in the new schedule III the provisions for preparation of balance sheet and statement of profit and loss have been given which are on the same lines as in the existing schedule VI.

1. FINANCIAL STATEMENTS AND AUDIT
REQUIREMENTS UNDER COMPANIES
ACT 2013
CS RAJESH KARUNAKARAN

2. Books of Accounts
• Books of Accounts
• Books of Account, Relevant Books & Papers and Financial
Statements to be kept at Registered Office [S.128(1)]
• If kept/maintained at place other than Regd. Office as
decided by BOD, intimation to be filed with ROC in Form
AOC 5, within a week
• Books of A/c to be kept on accrual basis, according double
entry system of accounting
• Open for Inspection at the Reg. Office by any director
during business hours [S.128(3)]
• Books of accounts & relevant vouchers to be kept at least 8
years & in good order.

3. Books of Accounts ………
• The Books of A/c, Other relevant papers and
Information can be maintained in electronic
form
• Accessible in India
• Remain complete and unaltered
• Documents to be displayed in a legible form
• Proper system is required for storage,
retrieval, display or printout

4. Definition of Financial Statements
• FINANCIAL STATEMENTS Section 2(40) •
Balance sheet, • Profit & Loss account, • Cash
flow statement,( not for OPC, small company
& dormant company).

5. Financial Year
• FINANCIAL STATEMENTS Financial Year :
Section 2(41)
• 31st march every year.
• For 1st year of incorporation
• If incorporated before 1st January– 31st
March same year. • Otherwise -- 31st march
of next financial year

6. Consolidated Financial Statements
• Consolidated Financial Statements •
Consolidated financial statement of all
subsidiaries and company shall be placed
before the AGM. (Section 129 (3)).
• Subsidiary includes Associates and Joint
venture companies for the purposes of this
section.

7. Adoption of Financial Statements
• Financial Statement • Financial statement
shall be laid at every Annual General Meeting.

8. Recasting of Books of Accounts
• Re-opening or re-casting of books of accounts of
the company
• An order in this regard is made by Tribunal to
effect that:
• The relevant earlier accounts were prepared in
fraudulent manner.
• The affairs of the company were mis-managed
during relevant period casting the doubt on
reliability of financial statement.
• The accounts so revised or re-cast shall be final.

9. Voluntary Revision of Financial
Statements
• Voluntary Revision of Financial Statements or
Board’s Report (Section 131) If it appears to the Board
that Financial Statements or Board Report do not
comply the provisions of section 129 & 134, they may
prepare Revised Financial Statements / Board Report.
Conditions:
• any of the 3 preceding financial years.
• not more than once in a financial year.
• reasons shall be disclosed in Board’s Report.
• with the approval of Tribunal
• copy of order of Tribunal shall be filed with ROC.

10. Contents of Board Report
Board Report
* Financial Highlights and Directors
• Web Address of the Annual Return
• No. of Meetings of the Board
• Director’s Responsibility Statement
• Fraud reported by the Auditor
• Explanation/Comments on qualifications/adverse comment/disclaimer by the
Auditor & CS
• Loans, Guarantee & Investment – u/s 186
• Contracts/Arrangements with RP – u/s 188 (Form AOC 2)
• State of Co’s affairs ▪ Amount transferrable to any reserves ▪ Amount of proposed
dividend
• Material Changes/Commitment affecting Financial Position – Between end of FY to
date of Board’s Report
• Conservation of Energy, Technology absorption, Forex earning & outgo ▪
Development & Implementation of Risk Management Policy
• Details of CSR policy and initiatives taken during the year

11. Board Report…….
• Change in the Nature of Business
• Details of Directors or KMP who were appointed or have resigned
during the year
• Names of Companies which have become or ceased to be its
Subsidiaries, joint ventures or associate companies during the year
• Details relating to deposits, covered under Chapter V of the Act and
not in compliance
• Details of significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and
company’s operations in future
• Disclosure regarding maintenance of Cost Records
• Statement that the company has complied with provisions relating
to the constitution of Internal Complaints Committee under the
Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013

12. CSR under Section 135 of Cos Act
• Corporate Social Responsibilities (Section
135) Every company during any financial year
having : • Net worth of Rs.500.00 crores or
more or • Turnover of Rs.1000.00 crore or
more or • Net profit of Rs.5.00 crores or more
shall undertake CSR Obligation.

13. Applicability of Internal Audit
• Internal Audit Applicable to: • Every private
company having : Turnover of Rs.200 crore or
more, or Outstanding loans or borrowing of
Rs.100 crore or more .
• Internal auditor shall be Chartered Accountant
or Cost Accountant or such other professional
as may be decided by the Board. The Board
shall formulate the scope, official periodicity
or methodology for conducting internal audit.

14. Auditors Appointment
• AUDIT & AUDITORS • First auditor shall hold
office till the conclusion of first AGM.
• In first AGM auditor shall be appointed till the
conclusion of 6th Annual General Meeting and
thereafter every 6th AGM.
• The company shall inform to the Auditor and
shall also intimate ROC within 15 days.

15. Pre requisites before Appt.
• AUDIT & AUDITORS Before appointment is
made: • Written consent of auditor.
• Obtain a certificate specifying :
Appointment if made shall be in accordance
with the conditions as may be prescribed. •
Appointment shall be in accordance with
section 141.

16. Maintenance of Cost Records
• APPLICABILITY FOR COST RECORDS (RULE 3)
Pursuant to the provisions of section 148(1) read with Rule 3 of the
Companies (Cost Records and Cost Audit) Rules, 2013 every
company including foreign companies, engaged in the production of
goods or providing services provided in table A and B, having an
overall turnover from all its products and services of Rs. 35 Crore or
more during the immediately preceding financial year, shall be
required to maintain cost accounting records.
Note that Companies which are classified as a micro enterprise or a
small enterprise are also excluded from the purview of the rules.

17. Applicability of Cost Audit
• The criteria for applicability of cost audit are different
for companies in regulated and non-regulated sector.
• For Regulated sector (Telecommunication, Electricity,
Petroleum and Gas, Drugs and Pharma, Fertilizers and
Sugar) the threshold is Rs. 50 crores for all products
and services and Rs. 25 crores for individual product or
services.
• For Non-Regulated Sector Threshold is Rs. 100 crores
for all product and services and Rs. 35 crores for
individual product or services.

18. Filing of Financial Statements
• This Section provides that a copy of FS, auditor’s
report etc shall be filled with the Registrar within
30 days.
• In case a company does not hold an AGM or the
AGM has been adjourned in any year, a
statement of facts and reasons along with FS and
attachment has to be filed with the Registrar.
• In case the accounts are not adopted at AGM or
adjourned meeting, the unadopted accounts shall
be filed with ROC who shall take them in his
records as provisional till final accounts are filed.