(As per Companies Act, 2013)

Presentation By:Kajal BansalB.Com, CA Inter

COMPANY BOOKS OF ACCOUNTS

MAINTENANCE OF BOOKS OF ACCOUNTS [SEC 128(1)]1. Every Co. shall

• Prepare & Keep• Registered office• Books of A/cs and Other Relevant Books &

Papers and Financial Statements• Every financial year• True & Fair view of State of Affairs• Including that of Branch Office or Offices, if any.

2. In a position to explain the transactions effected both at registered office & branches.

3. Accrual Basis & according to Double Entry System of Accounting.

PLACE OF MAINTENANCE 1. Registered Office2. Any other place in India as BOD

may decide. In this case,• Co. to file with ROC• Notice in writing• Full address of that place• Within 7 days of Board’s decision.

ELECTRONIC FORM1. Companies (Accounts) Rules, 20142. Books of A/cs and other relevant books

& papers in electronic mode shall:• Remain accessible in India so as to be usable for

subsequent reference.• Retained in the format in which originally

generated, sent or received; or which shall present accurately the information generated, sent or received; Complete & Unaltered

• Information from Branch Offices – Unaltered• Legible Form• Proper system for Storage, Retrieval, Display,

Printout• Backup to be kept in servers physically located in

India

ELECTRONIC FORM3. Co. shall intimate to ROC on

annual basis at the time of filing of FS• Name of Service Provider• Internet Protocol Address of Service

Provider• Location of Service Provider• In case books of accounts and other

books & papers maintained on cloud, such address as provided by Service Provider.

BOOKS OF ACCOUNTS – BRANCH1. Proper Books of Accounts relating to

transactions effected at branch office in India or outside India shall be kept at that branch office.

2. Proper summarised returns periodically must be sent by branch office to the company at its registered office or other place as decided by BOD.

WHO CAN INSPECT [SEC 128(3) & (4)]1. Books of accounts and other books & papers maintained in

India shall be open for inspection at registered office or such other place in India by any director during business hours.

2. In case of financial information maintained outside India, copies of such financial information shall be maintained & produced for inspection by any director subject to conditions prescribed under Companies (Accounts) Rules, 2014 which provides that:• Summarised returns of such books shall be sent to registered office

at quarterly intervals.• In case director requires any other financial information maintained

outside India, he shall furnish a request to the company setting out full details of financial information sought & period for which such information is sought.

• Co. shall produce such information to director within 15 days of the date of receipt of written request.

• Financial information so required shall be sought for by director himself and not by or through his power of attorney holder or agent or representative.

WHO CAN INSPECT [SEC 128(3) & (4)]3. Inspection in respect of subsidiary shall be done

only by the person authorized in this behalf by a resolution of BOD.

4. The officers and other employees of the company shall give to the person making such inspection all assistance in connection with the inspection which the company may reasonably be expected to give.

PERIOD OF MAINTENANCE [SEC 128(5)]1. Books of A/cs together with relevant

vouchers shall be kept in order for a minimum of 8 financial years immediately preceding a financial year.

2. Where the Co. had been in existence for less than 8 years, it shall maintain the books for all such years.

3. In case of investigation ordered, CG may direct for Books of A/cs to be maintained for a longer period as it may deem fit.

PERSONS RESPONSIBLE FOR MAINTENANCE & PENALTY[SEC 128(6)]

1. Following persons are responsible:• Managing Director, Whole-Time Director

in charge of finance, Chief Financial Officer;

• Any other person of the Co. charged by BOD.

2. Punishment for Contravention:• Imprisonment, which may extend to 1

year; or• Fine, not less than Rs. 50,000 but which

may extend to Rs. 5,00,000; or• Both with imprisonment & fine.

FORM OF FINANCIAL STATEMENTS [SEC 129(1)]1. The financial statements shall:

• Give a true & fair view of the state of affairs of the company or companies.

• Comply with the AS notified under Sec 133.

• Be in the form or forms as may be provided for different class or classes of companies in Schedule III.

• However, the items contained in such financial statements shall be in accordance with AS.

FORM OF FINANCIAL STATEMENTS [SEC 129(1)]2. The above provisions relating to

nature & content of FS shall not apply to following companies:• Insurance Companies• Banking Companies• Company engaged in generation or

supply of electricity.• 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.

LAYING OF FS [SEC 129(2)]At every Annual General Meeting

of a company, the Board of Directors shall lay before the company the financial statements for the financial year.

CONSOLIDATED FS [SEC 129(3) & (4)]1. Where a Co. has 1 or more subsidiaries, it shall, in

addition to its own FS, prepare a Consolidated FS of the Co. and of all the subsidiaries in the same form & manner as that of its own.

2. CFS shall also be laid before AGM of the Co. along with its own FS.

3. Co. shall also attach along with FS, a separate statement containing the salient features of subsidiary(ies) in Form AOC-1.

4. Subsidiary shall also include Associate Co. & Joint Venture.

5. Consolidation to be in accordance with Schedule-III of the Act and applicable AS.

6. The provisions applicable to preparation, adoption & audit of FS of a Holding Co. shall, mutatis mutandis, also apply to CFS.

DEVIATION FROM AS [SEC 129(5)]If FS of a Co. do not comply with

AS, the Co. shall disclose in its FS the following:

1. The deviation from AS2. The reasons for such deviation3. The financial effects, if any,

arising out of such deviation.

EXEMPTIONS [SEC 129(6)]1. CG may, on its own or on an application

made 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 rules made thereunder, if it is considered necessary to grant such exemption in public interest.

2. Any such exemption may be granted either unconditionally, or subject to such conditions as may be specified in the notification.

CONTRAVENTION [SEC 129(7)]If a Co. contravenes the provisions of this

Section, the MD, WTD in charge of finance, CFO, or any other person charged by BOD with the duty of complying with the requirements of this Section and in their absence, all the directors shall be punishable with:

• Imprisonment for a term which may extend to 1 year; or

• Fine, not less than Rs. 50,000 but which may extend to Rs. 5,00,000; or

• Both with imprisonment & fine.

AUTHENTICATION OF FS [SEC 134(1), (2), (7)]1. The FS, including CFS, if any,

shall be approved by BOD before they are signed on behalf of the Board at least by the following:• The Chairperson of the Co. where he is

authorized by the Board; or• Two directors, out of which one shall be

MD; and• The CEO, if he is a director in the Co.• The CFO, wherever he is appointed; and• The CS of the Company, wherever he is

appointed.

AUTHENTICATION OF FS [SEC 134(1), (2), (7)]2. In case of OPC, FS shall be signed by

only 1 director, for submission to the auditor, for his report thereon.

3. The auditor’s report shall be attached to every FS.

4. A signed copy of every FS, including CFS, if any, shall be issued, circulated or published along with a copy each of:• Any notes annexed to or forming part of such FS;• The auditor’s report; and• The Board’s report.

BOARD’S REPORT [SEC 134(3) & (4)]1. The Board’s Report shall be prepared based

on the standalone FS of the Co. and the report shall contain a separate section wherein a report on the performance and financial position of each of the Subsidiaries, Associates & Joint Venture Cos. included in CFS is presented.

2. In case of OPC, the report of BOD to be attached to FS shall mean a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.

CONTENT OF DIRECTOR’S RESPONSIBILITY STATEMENT [SEC 134(5)]

1. In the preparation of annual accounts, applicable AS had been followed alongwith proper explanation relating to material departures;

2. Directors had selected such accounting policies and applied them consistently and made judgements & estimates that are reasonable & prudent so as to give a true & fair view of the state of affairs of the Co. at the end of FY and of the Profit & Loss of the company for that period;

3. The directors had taken proper & sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Co. and for preventing & detecting fraud and other irregularities;

CONTENT OF DIRECTOR’S RESPONSIBILITY STATEMENT [SEC 134(5)]

4. The directors had prepared the annual accounts on a going concern basis;

5. The directors, in case of a Listed Co., had laid down internal financial controls to be followed by the Co., and that such internal financial controls are adequate and were operating effectively.

6. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems were adequate and operating efficiently.

SIGNING OF BOARD’S REPORT [SEC 134(6)]The Board’s Report and any

annexure thereto shall be signed by its chairperson of the Co. if he is authorized by the Board, and where he is not so authorized, shall be signed by at least 2 directors, one of whom shall be a Managing Director, or by the director where there is one director.

CONTRAVENTION [SEC 134(8)]1. If a Co. contravenes any provisions

of this Section, the Co. shall be punishable with fine which shall not be less than Rs. 50,000 but which may extend to Rs. 25,00,000.

2. Every officer of the Co. who is in default shall be punishable with:• Imprisonment for a term which may extend

to 3 years; or• Fine, not less than Rs. 50,000 but which

may extend to Rs. 5,00,000; or• Both with imprisonment & fine.

WHO ARE ENTITLED FOR AUDITED FINANCIAL STATEMENT1. A Copy of FS, which are to be laid before a

Co. in its AGM, shall be sent to the following:• Every member of the Co.• Every trustee for the debenture-holder of any

debentures issued by the Co., and• To all persons other than such member or trustee, being

the person so entitled.2. CFS, if any, Auditor’s Report and every

other document required by law to be annexed or attached to FS shall be annexed with FS.

3. These FS shall be sent in not less than 21 days before the date of meeting.

WHO ARE ENTITLED FOR AUDITED FINANCIAL STATEMENT4. In case of a Listed Co.:

• These provisions shall be deemed to be complied with, if the copies of documents are made available for inspection at its registered office during working hours for a period of 21 days before the date of meeting.

• Along with it, a statement containing the salient features of such documents in Form AOC-3 or copies of the documents, as the Co. may deem fit, is sent to every member and every trustee for debenture holders.

• The statement is to be sent not less than 21 days before the date of meeting unless the shareholders ask for full financial statements.

5. A Co. shall also allow every member or trustee of the debenture holders to inspect the audited FS at its registered office during business hours.

MANNER OF CIRCULATION OF FS1. In case of all Listed Cos. and such Public Cos.

having Net Worth of more than Rs. 1 Crore and turnover of more than Rs. 10 Crores, the FS may be sent:• By electronic mode to such members whose shareholding

is in dematerialized format;• Otherwise, to such members who have positively

consented in writing for receiving by electronic mode; and• By dispatch of physical copies through any recognized

mode of delivery.2. A Listed Co. shall also place its FS including

CFS, if any, and all other documents required to be attached thereto, on its website, which is maintained by or on behalf of the Co.

SUBSIDIARY COMPANIESEvery Co. having a subsidiary or

subsidiaries shall:1. Place separate Audited A/cs in

respect of each of its subsidiary on its website, if any;

2. Provide a copy of separate audited FS in respect of each of its subsidiary, to any shareholder of the Co. who asks for it.

CONTRAVENTION1. If any default is made in

complying with the provisions of this Section, the Company shall be liable to a penalty of Rs. 25,000.

2. Every officer of the Co. who is in default shall be liable to a penalty of Rs. 5,000.

FILING OF FS [SEC 137(1)]1. A copy of FS, including CFS, if any,

along with all the documents which are required to be or attached to such FS under this Act, duly adopted at the AGM, shall be filed with ROC within 30 days of the date of AGM.

2. If FS are not adopted:• Unadopted FS alongwith required documents

shall be filed with registrar within 30 days of AGM.

• Register shall take them as provisional till FS are filed after adoption.

FILING OF FS [SEC 137(1)]3. Filing by OPC:

OPC shall file a copy of FS duly adopted by its member, alongwith all required documents within 180 days from the closure of FY.

4. Co. having subsidiaries:A Co. shall attach the A/cs of its

subsidiary(ies) which have been incorporated outside India and have not established their place of business in India, alongwith its FS.

FILING OF FS [SEC 137(2)]5. AGM not held:

The FS alongwith documents required to be attached, duly signed alongwith the statement of facts & reasons for not holding AGM, shall be filed with Registrar within 30 days from the last date on which AGM should have been held.

FILING OF FS [SEC 137(3)]6. Penalty:• Co. shall be punishable with fine of Rs. 1,000 for

each day during which failure continues, but shall not exceed Rs. 10 Lacs.• MD & CFO, if any, and in their absence, any

other director who is charged by the Board with the responsibility of complying with this Section, and in the absence of such director, all directors of the Co. shall be punishable with: Imprisonment for a term which may extend to 6

months, or Fine, not less than Rs. 1 Lac, but which may extend to

Rs. 5 Lacs Both with imprisonment & fine.