Accoumts of Companies

Chapter IX of the
Companies
Accounts of CompaniesAct, 2013
Sanan
Books ofaccount, etc., to be kept by
Marginal Heading
128
Financial statement
company
129

130
Re-opening ofaccounts on court's
or
Tribunal's orders
Voluntary revision of financial statements
or Board's
131
Constitution of
report
132
National Financial Reporting Authority
1.33
CG to prescribe accounting standards
Financial statement, Board's report, etc
134

135
Corporate Social1R
Responsibility

136
TRight of member to copies of audited financial statement
7137 Copy of financial statement to be filed with Registrar
138 Internal audit

DEFINITION OFFINANCIAL STATEMENTS ISec. ISec.240)1

What does the term Financial Statements include in relation to
Nov. 2018
need not prepare a cash flow statement?
a company under the Companies Act, 2013? Which companles
Teterm 'financial statements' is defined under Clause (40) of Sec. 2, as follows:

Financial statements' in relation to a company, includes

B/S as at the end ofthe FY;
PaL AIC for the FY (In the case of a company carying on any activity not for profit, an income and expenditure
account for the FY);
Cash Flow Statement for the FY,
(i) Statement of changes in equity, if applicable; and
) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv).
However, the financial statement may not include the cash flow statement, if-
) the company is
0) OPC; or
() Small Company; or
i) dormant company, or
private company,ifsuch private company is a start-up, and
SUCh Company has not committed any default in filing with the Registrar its financial statements under section 137 or
amual return under section 92.
EaplS anation.ompanies purposes
ror the of this Act, the term
'start-up' "start-up company'
or private company incorporated
means a
Act, 2013 or the Companies Act, 1956 and recognised as start-up in accordance with Notification No.
ated 19th February, 2019, issued by the Department for Promotion of Industry and Internal Trade (DPIIT).
 LOCATION, MANNER, PERIOD OF MAINTENANCE (Sec. 128
AND INSPECTION OF BOOKS OF ACCOUNT
Every company shall prepare and keep books of account and othicr reievant books and
1. Preparation of pape and
FS (hereinafter referred to as 'books for every FY.
of account etc.)
books of
Book and paper' and "book or paper' include books of account, deeds, vouchers
account etc. wri
Scc.ings,
documents, minutes and registers maintaincd on paper or in electronic form [Clause ( 12) a f n g

2. Method/ The books of account elc. shall -

- -
2
manner of (a) give a truc and fair view of the state of the afflairs of the company, including
ng its branch
preparation office(s)
(b) explain the transactions effected at the registered office and its branch ofice(s);
(c) be pepared on accrual basis;
(d) be prepared according to the double entry system of accounting.
3. Manner of The books of account and other relevant papers may be kept in clectronic mode in such man
maintenance may be prescribed. manner as
of books of Rule 3 ofthe Companies (Accounts) Rules, 2014 preseribes the following manner:
account etc. in (a) The books of account etc. shall remain accessible in India.
electronic (b) The books of account etc. shall be retained
completely in the original fornat, or in a fou
which shall present accurately the information
form generated,
sent or received.
(c) The information contained in the electronic records shall remain complete and
(d) The information contained in the electronic records shall be legible.
unaltered
(e) There shall be a proper system for storage, rctrieval, display or
records.
printoul of the electronie
omc
( The electronic records shall not be
disposed of unless permitted by law.
(g The back-up of the electronic records
shall be kept in servers
periodic basis. physically locatecd in India on a

(h) The company shall intimate to the Registrar on an annual basis-

) the name of the service provider;
(i) the internet protocol address of service
provider;
ii) the location of the service provider
(wherever
(iv) where the books of account etc. are maintainedapplicable);
the service provider.
on cloud, such address is
as
provided by
4. Location of
Registered office The books of account etc.
shall be
books of kept at the registered office of the
company.
account etc. Any other place in All or any of the books of
India account etc. may be
India as the Board of directors kept at such other place in
In such a case, the may decide.
company shall file
containing the full address of such other withThe the Registrar a notice
within 7 days, in Form No. AOC-5. place. noticc shall be filed,
Branch office
Where a company has a
branch office (whether in
the books of
account etc. India or outside India),
branch offtice may be relating to the transactions effected al tne
In such a
kept at the branch
office.
case, proper
the branch summarized returns must be
office at -

periodically sent oy
) the registered ofice of
the
(ii) such other company; or
place where books of account
etc. are
kept.
 Preservaton o f Evciy cOmpany Snan
pieSCIVe in good
pernod of preservation shall the books
vouchers. The ime ordcr of account togetnet w"

h o o k so f
(a) not less than 8 FYs be
KConnt (b) 11 he
company has
immediatcly preccding the relevant FY; or
becn in
existence for lcss than its
CXIstence. 8 EYs. then, for the entire
(c) whCre an
mvCstigation of the
company is ordered, CG may direct that the
shallbe kept for such longer period as may be
o
h Inspeciono f (a) he books o1 directed by CG.
accoun etc. maintained within nlia shall
director- be open for inspeci
h o o k so f
at the registered office of the company or at such other place in India where the booKs
nCcount have been kept,
during business hours.
(b) Finaiicial
ntOrmation maintaincd outside India
such conditions as may be may bc inspcctcd by any director sto
prescribed.
Provisions contained in Rule 4 of the
(1)
Companies (Accounts)
Rules, 2014,
ne summarised returns of the books of account of the company kept and
maintai
d
ou sioe inda shall be sent to the registered ofice at quarterly intervals. Such summarized
reurns shall be kept and maintained at the registered office of the company and kept up
directors for inspection.
(2Where any other financial information maintained outside the country is required bya
rector, he director shall furnish a request to the company setting out the full details of tne

inancial intormation sought and the period for which such information is sought.
(8)he company shall produce such financial information to the director within 15 days of the
date of receipt of the written
request.
(4) he financial information required under Sub-Rules (2) and (3) shall be sought for by ne
directorhimselfand not by or through his power of attorney hoider or agent or representative.
(c) The inspection of books of account of any subsidiary company shall be made only by the

person authorised by a resolution of the Board of Directors.

(d) It shall be the duty of every officer and employee of the company to give to the person
making inspection all reasonableassistance in connection with theinspection.
7. Persons
Persons responsible| i) Managing director
responsible and i) Whole-time director in charge of finance
(ii) Chief Financial Officer
Penalty
(1V) Any otherperson ofa company charged by the Board with such duty
Punishmentfor i) Imprisonment upto I year, or
Contravention (ii) Fine: Minimum Rs. 50,000; Maximum Rs. 5,00,000.
(ii) Both.
MCA has ciarified that the FS (and documents required to be attached thereto), auditor's report
8. Applicability of
earlier than lst April, 2014 shall be
and Board's report in respect of PYs that commenced
Companies Act, Schedules / rules of the Companies Act, 1956 and that in
1956 and governed by the relevant provisions / the Companies Act,
or after Ist April, 2014, the provisions of
respect of FYs commencing on
LUgaiieSACL,|2013 shall apply (General Circular No. 08/2014 dated 4th April, 2014).
2013

FINANCIAL STATEMENTS Sec (Scc. 129

1. Legal a true and lar view ol the
stale ol allairs of the company.
(a) The FS shall give
with the AS notified u/s 133.
requirements (b) The FS shall comply
the AS, the company shall disclose in its FS,
-

W.r.t. financial If the FS do not comply with

the AS;
statements (i) the deviation from
11) the for such deviation; and
reasons
Sec. 129(1)} if arising out of such deviation.
(iil) the financial effects, any, classes of
or foms as may be provided for different class or
(c) The FS shall be in the form
Schedule III.
companies in
* * *
- *******~** * * ****
 to
Nothing contained in Sec. 129(1) shall apply
-

. Non-
applicability (a) any insurance company; or
(b) any banking company; or or
or supply of electricity;
(C) any company engaged in the generation in the Act
(d) any other class of company for
which a form of FS has been specitied Act governing
such class of company.
3. Laying of At every annual general meeting, the Board shall lay the following documents:
(a) FS of the company; and
financial subsidiaries and associate companies, if any.
b) CFS of the company and of all the
statemcnts
2014 makes the following provisions:
4. Form and items Rule 4A of the Companies (Acounts) Rules,
in Schedule IIl to the Act and comply with
AS or
(a) The FS shall be in the form specified
contained in Indian Accounting Standards, as applicable.
financial in accordance with the definitions and ot
(b) The items contained in the FS shall be prepared the case mav
statements or the Indian Accounting Standards, as
requirements specified in the AS be.
it shall also Da
subsidiaries or associate companies,
Where has one or more
5. Consolidated (a) acompany
subsidiaries and associate companies.
CFS of the company and of all the
financial and audit of the FS of
The provisions relating to the preparation, adoption
hold:
statements
(b)
mutatis mutandis, apply to the CFS.
a
olding
company shall,
(CFS) (c) The CFS shall be prepared in the
same form and manner of its as that own.

accordance with applicable AS.

(d) The CFS shall be prepared in with its own FS.
The CFS shall also be laid before the AGM of the company along
(e) CG may provide for the consolidation of accounts ot companies in such manner as may be
(
prescribed.
Rule 6 ofthe Companies (Accounts) Rules, 2014 lays down the following provisions:
The consolidation of FS of the company shall be madc in accordance with the provisions of
i)
Schedule III of the Act and the applicable AS.
(ii) If a company is not required to prepare CFS under the AS, it shall be sufticient if the
in Schedule llI of the Act.
company complies with the provisions contained
(iii) Preparation of CFS shall not be required for a company, if it satisfies all the following
conditions:
(b) It is a company whose securities are not listed and are not in the process of listing on
exchange, whether in India or outside India.
any stock
(c) Its ultimate or any intcrmediate holding company files CFS with the Registrar which
are in compliance with the applicable AS.
(iv) A company which does not have any subsidiary but has onc or more associate companies or
joint ventures or both, is not required to prepare CFS in respect of associate companics or
joint ventures or both. However, this relaxation shall be available only for the FY 2014
2015.
(v) A company which does not have any subsidiary in India, but has one or more subsidiaries
incorporated outside India, is not required to prepare CFS in respect of the subsidiaries
incorporated outside India. However, this relaxation shall be available only for the FY

2014-2015.
Statement The company shall also attach along with its FS, a separate statement containing the salient
containing features of the FS of its subsidiaries and associate companies in such form as may be prescribed,
viz. Fom No. AOC-1, as per Rule 5.
salient features
of the
subsidiaries and
associate
companies
 hap2 Ompanies
(a) CG may, by
Exempiion
any of the notification, excmpt any class or
(b) CG may
requirements of this section classes of
or the rules made
companie
companics.
grant such
exemption on sits Own
own or on an
thereunder
application by a class or cla5ses of

(c) CG may
applicA
g1ant such
exemption if it considers necessary to
public interest gran
(d) Such
excmption may be granted either
be spccified in the
notification. unconditionally or subject to sue
For the purposes
f Sec. 129, any reference to the FS shall inchude
Notes any notes 2
(a) Fo1owng persons shall be held
Persons
this section: responsible for ensSuring compliance ot tne
p
responsible a n d

punishment for Managing director

(ii) Whole-time director in
non-compliance
charge of finance
(ii) Chief Financial Officer
(iv) Any other person of a
company charged by the Board with such du
( A l l the directors, in the absence of any ofthe officers mentioned above.
(6) n case of non-compliance of any of the provisions of this section, all such persons snah be
liable to
i) imprisonment upto 1 year, or
(11) fine: Minimum Rs. 50,000; Maximum Rs. 5,00,000; or
(iii) both.
to the
Section 129 shall not Government company cngaged in defence production
apply to a
if it has not
extent oi application of relevant Accounting Standard on Segment Reporting
J8.E x e m p t i o n

under section 15/ or

committed any default in filing with the Registrar its financial statements
annual return under section 92 [Notification No. G.S.R. 463(E) dated 5th June, 2015].

(Sec. 130
RE -OPENING OF ACCOUNTS ON
COLRT'S OR TRIBUNAL'S ORDERS
(a) An application shall be made to the Court or Tribunal by.
Conditions for re-
(i) CG; or
of
upening the books (ii) SEBI; or
account and
(1i) the Income-tax authorities; or
recasting the FS authority; or
other statutory regulatory body or
(1V) any
concerned.
(v) any person
effect that
An order is made by a Court or the Tribunal to the
(b) were prepared in a fraudulent manner;
or
accounts
(i) the relevant earlier the relevant period, because of
were mismanaged durng
(i) the affairs of the company FS reliable or not.
raised as to whether the
are
which doubts are notice to, and shall take
int-
the Court or the
'Tribunal shall give
(c) Beforc passing any order, il any, made by, -
consideration the representations,

0) CG; Board of India;

Securities and Exchange
(i) the
ncome-tax
authorities;
(11i) the or authority concemed;
statutory regulatory body
(iv) any other concerned.
***
other person
(V) any
 re-opening of books
No re-opening of (a) No order shall be made by the Tribunal in respect of of accoun
preccding the current FY,
books of account for relating to a period earlier than 8 FYs immediatcly u/s 128 that the
where a direction has been issued by
CG company
(b) However, shall ken
kep
a period earlier than the books of account for a period longer than 8 years, the books of account
preceding 8 FYs ordered to be re-opened within such longer period. may be
The accounts revised or re-cast u/s 130 shall be final.
Recast accounts to be
final
VOLUNTARY REVISION OF FS OR
BOARD'S REPORT (Sec. 131
.5 The Board of directors may decidc to prcpare the revised FS or a revised Board's Report
Conditions for ,if the
following conditions are satisfied:
voluntary revision
(a) The Board is ofthe opinion that
G) the FS do not comply with the provisions of Sec. 129;
or

134,
(1i) the Board's Report does not comply with the provisions of Sec.
(b) The FS or the Board's Report may be revised only in respect of any of the preceding 3
(c) The revision of the FS or the Board's Report may be made only after obtainina
the
approval of the Tribunal.
For this purpose the company shall make an application to the Tribunal in such f
form
and manner as may be prescribed.
Before passing any order, the Tribunal shall give notice to CG and Income
Authorities, and shall take into consideration the representations, il any, made by C
Tax
and Income Tax Authorities.
The copy of the order of the Tribunal shall be filed with the Registrar.
The revised FS or the Revised Board's Report shall not be prepared more than once in a
(d)
FY.
(c) The detailed reasons for revision of the FS or the Board's Report shall be disclosed in the
Board's report prepared for the relevant FY, viz. the FY in which such revision is made.

(1 Where copies of the previous FS or Board's Report have been sent out to members or
delivered to the Registrar or laid before the company in GM, the revisions must be
confined to
(i) the correction in respect of which the previous FS or Board's Report do not comply
with the provisions of Sec. 129 or Sec. 134; and
i) the making of any necessary consequential alteration.
Power of CC to CG may make rules as to the application of the provisions of this Act in relation to revised FS or
make rules a revised Board's Report. Such rules may, in particular-
(a) make different provisions according to which the previous FS or Board's Report are
replaced or are supplemented by a document indicating the corrections to be made;
(6) make provisions with respect to the functions of the company's auditor in relation to the
revised FS or Board's report;
c) requirethedirectors to takesuch steps as may be prescribed.

9.6 CONSTITUTION OF NATIONAL FINANCIAL REPORTINGAUTHORITY (Sec. 132

(A) Provisions contained in the Act.
Constitution of CG may, by notification, constitute a NFRA to provide for matters relating to accounting and
NFRA by CG auditing standards under this Act.
Composition of (a) NFRA shall consist of -

NFRA (i) a chairperson; and

1) such other part-time and full-time members, not cxcceding 15, as may be prescridea.
(b) The chairperson shall be a
person of eminence and having expertise in
auditing, finance or law. accountancy
| (c) The chairperson shall be appointed by CG.
 hiay, 9
(a) NFRA Shall perform its
pivisionsOfNFR
o fN F R A
functions through such divisions as may be pi scribed

(b) Each division of itme Memb

NFRA shall be presided over by the
authorised by the Chairperson. Chairperso
or

full-time
(c) There shall be an executive body of NERA Chairperson
and
Members of NFRA for cfficicnt Consisting of the
discharge of its functions.
The NFRA shall -

ofNFRA
F i u n c t i o n so fN F R

d
ons (a) make recommendations to CG on the formulation and laying down of accoun
auuung policies and standards for adoption by companies or class of compaune
auditors, as the case nmay bc;
(6) momtor and enforce the compliance with accounting standards and auditing stai,

such manner as may be prescibed; with

(c) oversee the quality of service of the professions associated with ensuringcomplat
Suc stanards, and suggest measures reauired for improvement in quality of service ai

such other related matters may be

as
prescribed, and
(d) perfom such other functions as may be
prescribed. shall
and
Termsandd
The terms and conditions and the manner of appointmcnt of the chairperson
be such as may be prescribed.
conditions

form regaraln
1he chairper and members shall make a declaration to CG in the prescribed
of
declaration
aperson
Filing no conflict of interest or lack of independence in respect of his or their appointment
by the chairperson

a n dm e m b e r s

n0t D

Chairperson and Tne chairperson and members, who are in full-time employment with NFRA Shal
associated with any audit firm (including related consultancy firms)
ful-time m e m b e r s

(a) during the course of their appointment;, and

be associated
not to (b) 2 years after ceasing to hold such appointment.
with audit firms
or other
Powers of NFRA (a) NFRA shall have the power to investigateinto the matters of professional
misconduct committed by any member or firm of chartered accountants.a reference made to
1. NFRA is empowered to conduct such investigation either suo motu or on

it by CG.
or continue
2. Where NFRA has an investigation, no other institute
initiated
or body shall initiate
any proceedings in such matters of misconduct.
Civil
NFRA shall have the same powers as are vested in a civil court under the Code of
(b) matters:
Procedure, 1908, while trying a suit, in respect ofthe following such place and
account and other documents, at
(1) Discovery and production of books of
at such time as may be specified by
NFRA
on oath
the attendance of persons and examining them
(11) Summoning and enforcing
and other documents at any place
(i) Inspection of any books, registers documents.
examination of witnesses or
(iv) Issuing commissions for NFRA shall have the power to make
is proved,
Where professional or other misconduct
(c) order for-

(A) imposing penalty of- received, in

not less than Rs. 1 lakh, but which may cxtend to 5 times of the fees
(i)
case of individuals; and
lakh, but which may extend to 10 times of the fees received,
(ii) not less than Rs. 5
in case of fims;
tlhe firm from
-

(B) debarring the member or

as an auditor or intenal auditor or undertaking any audit in
() being appointed functions and activities of
respect of financial
statements or internal audit of the
or body corporate; or
any company
 9,8

valuation as provided u/s 247,

(i) performing any not exceeding 10
months or such higher period years as
for a minimum period of 6
determined by NFRA.
may be dt
the s a m e meaning assigned to it
shall have
The expression 'professional
or other
misconduct' uls
22 ofthe Chartered Accountants Act, 1949
an appeal betfore the Appellatee T
Tribunal
Appeals against Any person aggrieved by any order of NFRA may prefer
be prescribed.
payment of such fee
as may
in such manner and on
order of NFRA
as may be prescribed.
Meetings of NFRA (a) NFRA shall meet at such times and placcs transaction of business a its
obscrve such procedure with regard to the
(b) NFRA shall
meetings as may be prescribed. as it may consider necessary for
CG may appoint a secretary and
such other employees rthe
Secretary and other (a)
efficient performance of functions by NFRA under this Act.
shall be such as mav !
employees (b) The terms and conditions of service of the secretary and employees be
prescribed.
at New Delhi.
Head office of (a) The head office of NFRA shall be
places in India as it may deem fit.
NFRA (6) NFRA may meet at such other

NFRA shall cause to be maintained such

books of account and other books in relation to:its
Maintenance of accounts in such form and in such manner as CG may, in consultation with the Comptroller and
and
books by NFRA
Auditor-General of lIndia prescribe.
-

The accounts of NFRA shall be audited by the Comptroller and Auditor-General of India at such
Audit of accounts of intervals as may be specified by him and such accounts as certified by the Comptroller and
NFRA Auditor-General of India together with the audit report thereon shall be forwarded annually to
CG by NFRA.
Annual report on NFRA shall prepare in such fonm and at such time for each financial year as may be prescribed
working of NFRA its annual report giving a full account of its activities during the financial year and forward a
copy thereof to CG and CG shall cause the annual report and the audit report given by the
Comptroller and Auditor-General of India to be laid before each House of Parliament.
(B) Provisionscontainedin the National Financial Reporting Authority Rules, 2018.
Classes of NFRA shall exercise its powers with respect to folloWing classes of companies and bodies
companies and corporate:
bodies corporate (a) Companies whose securities are listed on any stock exchange in India or outside India
governed by NFRA (b) Unlisted public companies having paid-up capital of not less than Rs. 500 crore or having
annual turnover of not less than Rs. 1,000 crore or
(Rule 3) having, in
debentures and deposits of not less than Rs. 500 crore as onaggregate, outstanding loans,
31st March of immediately
preceding FY
(c) Insurance companies, banking companies,
companies engaged in the
companies governed by any special Act or bodies generation supply
of electricity, or

under any special Act corporate incorporated

(d) Any body corporate or
company or person, or any class of bodies
or
persons, on a reference made to NFRA corporate or companies
(e) A by CG in public interest
body corporate incorporated or
associate company of registered outside India, which is a subsidiary or
any company or body
referred to in points (a) to corporatc incorporated or registered in India as
associate company exceeds (d) above, if the income or net
worth of such subsidiary
income or consolidated net worth or
Such company or the
20% of the consolidated
above. body corporate, as the case or
may be, referred to in
A
company
points (a) to (a)

after it
or a
body corporate shall continue to be
ceases to be
listed or its
paid-up capital governed by NFRA for a period of 3
deposits falls below the or turnover or years
prescribed limit. aggregate of loans, debentures a
 Every CXIsting body nipan1es
ntimatiOn b y
rtain comnpanies
NFRA within 30 dayscorporate
of the
other than a con
Ompany governed by these
rules, shall
informn

November, 2018), in Form commcncement

ent o rules (viz. within 30 days from5n
off these rules
a n db o d i e s NFRA-1, the particulars of the auditor( as on 3th Novemo
corpora t o .NFRA

(Rule 3)
Recommending (a) For he purpose of reconmmending oval
by CG, NFRA- accounting standards or auditing stane
Ceounting (i) shall receive
standardsa n d

or recommendations from ICAI on proposals for ncw accounting sta ards

auditing standards or for
R d i t i n g S f a n d a r d s
i
amendments to existing accouning or auditinB
standards; sia"

(Rule6 )
(11) may seek additional information from ICAI nder
point (i) above, if required. on the recommendations
(b) NFRA Shall consider the as t
deems fit before recommendations and additional infomation in sucn
inia
making
Punishment for If a company or any officer ofrecommendations to CG.
a of
the provVisions company or auditor or any othier
an
contravention of these rules, the company and every officer
peido i s in default or
of the company
the auditor or such

(Rule13)
other person shall be
punishable as per the provisions of Sec.Oc
450 Or the Act

CENTRAL GOVERNMENT TO PRESCRIBE AS Sec. 133

i. Power with The power to
prescribe the AS vests with CG.
whom?

2. Stages in Stages in prescribing the AS are

follows:
as
prescribing AS (i) At the first stage, ICAI
recommends the Standards of Accounting.
(ii) At the second stage, these Standards of Accounting shall be examined by NFRA. NFRA
may also make its own recommendations.
(111) At the third stage, CG examines the recommendations made NFRA. Then,
by CG may
prescribe, after consultation with NFRA, the AS.
The standards of accounting as specified under the Companies Act, 1956 shall be deemed to be
3. Position until A4S
the AS until AS are specified by CG u/s 133
are prescribed by (Rule 7(1) of the Companies (Accounts) Rule,
2014).
CG
4. Forms and items The financial statements shall be in the form specified in Schedule II to the Act and
contained in comply with AS or Indian Accounting Standards as applicable.
financial The items contained in the FS shall be prepared in accordance with the definitions and
other requirements specified in the AS or the Indian Accounting Standards, as the case
statements
may be[Rule 4A ofthe Companies (Accounts) Rules, 2014].

8 BOARDS REPORT, ETC Sec, 134

1ay 2018
Siate any four contents of a Directors Responsibility Statement asrequired under Secion 134 ofihe Companies Act, 2013.
Contents of (a) The web address, if any, where annual returm (prepared as per Sec. 92) has been placed.
Board's Report of (b) Number of mectings of the Board.
Company other (c) Directors Responsibility Statement [for the contents of Directors* Responsibility
than a )ne Statement, refer to Sec. 134(5)].
Contents of Directors' Responsibiliy Statement Sec. 134(5)].
Person Companyy Directors' responsibility statement is aimed at highlighting the accountability of the directors with
and small a view to ensuring good corporate governance. It ill make the directors accountable to
safeauard the assets of the company and to take positive steps in this regard. The directors'|
Company responsibility statement shal disclosethe following particulars:
 (a) Whether the applicable AS had been followed in the preparation of FS. In case of
material departures, proper explanation shall be given.
f any
(b) Whether the directors had selected such accounting policies and applied them consistent
and made judgments and estimates that are reasonable and prudent so as to give a tr
true
and fair view of the state of affairs of the company and of the profit and loss of the compan
(c) Whether the directors had taken proper and sufficient care -
any.
for the maintenance of adequate accounting records in accordance with the provisigne
of this Act;
for safeguarding the assets of the company; and
for preventing and detecting fraud and other iregularities.
(d) Whether the directors had prepared the FS on a going concen basis.
(e) Whether the directors had laid down internal financial controls to be followed by thel
company and whether such internal financial controls are adequate and were operatina
effectively, if the company is a listed company.
The term "internal financial controls" means the policies and procedures adopted by the
company for ensuring
the orderly and efficient conduct of its business, including adherence to companyY's
policies,
the safeguarding of its assets,
the prevention and detection of frauds and errors,
the accuracy and completeness of the accounting records, and
the timely preparation of reliable financial information.
() Whether the directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and whether such systems were adequate and operating effectively.
(ca) Details in respect of frauds reported by auditors u/s 143(12) other than those which are
reportable to CG.
(d) A statement on declaration given by independent directors fas per Sec. 149(7)1
(c) In case of a company which is required to constitute the Nomination and Remuneration
Committee (as per Sec. 178), company's policy on directors app0int1ment and
remuneration including crileria for determining qualifications, positive atributes,
independence of a director and other matters provided u/s 178.
However, if the above-mentioned company policy is made available on company's
website, ifany, it shall be sufficient complhance if the Board's report contains
) salicnt fecatures ofsuch policy (in b1ief)
(ii) changes, if any, in such policy (in brief). and
iii) the web-address at which the complete policy 1s available.
In the case of a Government company, this disclosure is not required {Notification No. G.S.R.
463(E) dated 5th June, 2015].
()Explanations or comments by the Board on every qualification, reservation or adverse
remark or disclaimer made -

() by the auditor in his report, and

(11) by the company secretary in practice in his secretarial audit report.
Particulars of loans, guarantees or investunents u/s 186.
| (h) Particulars ofcontracts or arrangements with related parties referred to in Sec. 188 in Form
AOC-2.
(i) The state of the company's affairs.
0)The amounts, if any, proposed to be transferred to the reserves.
(k) The amount of dividend proposed recommended by the Board.
(0) Material changes and commitments, if any, affecting the financial position of the company
which have occurred between the end of the FY of the company to which the FS relate and
the date of Board's report.
(m) The of energy,
conscrvation technology absorption, foreign exchange carnings and outgo
in such manner as may be prescribed (as prescribed under Rule 8(3) of the Companies
(Accounts) Rules, 2014).
 As per Rule
8(3)
of the Companies
following information and (Accounts) Rules, 2014, the
Conservation of energy. details: Boaid
Steps taken for
conservation of energy and the
Steps taken
alternate sources of impact sucn si
for of
(ii) The capital utilising
investment on energy energy.
Technology absorption. conservation equiprmen
() The efforts made
() towards technology absorption.
ne benefits derived like product improvement, cost
import substitution. reduction, produ
in) beginning
n case ofofimported technoloay (imported during the last 3 years reckoned from t e

(a) the details of

technology inmported;
(6) the year of import;
(c) whether the
technology
has been fully absorbed, taken
and th ds not been fully absorbed, where absorption has not
place, and
place the reasons thereof.
areas

(iv) The expenditure incurred on Research and

Foreign exchange earnings and Development.
i) Outgo.during the year in terms of actual intloWs.
The Foreign Exchange earned
(ii) ne Foreign Exchange outgo during the year in terms of actual outfiows.
ne
requirement of
furnishing above
apply information shall not to a Government colay
engaged in producing defence equipment
(n) A Statement
indicating development and implementation of a risk management polcy
tne company mcluding identification therein of elements of risk, if any, which in the
opinion of the Board may threaten the existence of the company.
(0)The details about the policy developed and implemented by the company on corporate
social responsibility initiatives taken
during the year.
However, if the abovc-mentioned company policy is made available on company's
website, if any, it shall be sufficient compliance ifthe Board's report contains
() salient features of such policy (in
briet);
(1i) changes, if any, in such policy (in brief); and
(111) the web-address at which the complete policy is available.
(p) A statement indicating the manner in which formal annual evaluation of the performance
of the Board, its Committees and of individual directors has been made, if-
t h e companyis a listed company: or
Bthe company is a public company having paid-up share capital of Rs. 25 crore or more

as at the end of the preceding FY.

In the case of a Government company which has not committed any default in filing with the
u/s 137 or annual return u/s 92, this disclosure is not required if the directors
are
Registrar itsbyFSthe Ministry or Department of CG which is administratively in charge of the
evaluated

company, or, as the case SG, as per its own evaluation methodology [Notification No.
may be,
G.S.R. 463(E) dated 5th June, 2015)
(g) Such other matters as may be prescribed (as prescribed
under Rule 8(5) of the Companies
(Accounts) Rules, 2014).
per Rule 8(5) of the Companies
(Accounts) Rules, 2014, following other matters shall also be
As
disclosed in the Board's report of every company
The financial summary or highlights
() if
(1) The change in the nature of business, any.
The details of directors or KMP who were appointed or have resigned during the year.
(ii)
(iia) A statement regarding opinion of the Board with regard to integrity, expertise and experience
the independent directors appointed during the year.
(including the proficiency) of of thIs clause, the expression "proficiency" means the
Explanation. For the purposes
as ascertained from the online proficiency, self-
proficiency of the independent director
the institute notified under sub-section (1) of section 150.
assessment test conducted by
have become or ceased to be its subsidiaries, joint ventures
(iv) The names of companies which
companies during the year.
or associate
covered under Chapter Vof the Companies Act, 2013
(v)The details relating deposits,
to
the year;
(a) accepted during
(b) remained unclaimed as at the end of the year:
unpaid or
***
 or payment
default in repayment of deposits of
whether there has been any
(c)
the and if so, number of such c a s e s and the total nt inhtere
amount involvedest
thereon during year

(i) at the beginning of the year;

(ii) maximum during the yea
(ii) at the end of the year. with the requirements of Chans.
(vi) The details of deposits which
are not in compliance Chapter Vo
the Companies Act, 2013.
orders passed by the regulators or courts or
(vii) The details significant and material
of
impacting the going
concern status and company's
operations in future.
with reference to the Ee
tribunals
of internal financial controls FS
(vii) The details in respect of adequacy records as specified by CG ul
maintenance of cost uls
(ix) A disclosure, as to whether accountS and records are ma is
and accordingly such de
required by the company
maintained.
and
with proviSIons relating to the constith
(x)A statement that the company has complied Harassment of Women at Woof
under the Sexual
Internal Complaints Committee
(Prevention, Prohibition and Redressal)
Act, 2013. rkplace
have been included in Fs.
Where disclosures referred to in points (a) to (q) abOve such
of being repeated in the Board's report
disclosures shall be referred to instead
The Board's Report shall be prepared
based on the stand alone FS of the compan
The Report shall contain a report on and highlights
Board's
the of performanro
venture companies their contribution to the of|
subsidiaries, associates and joint overal
performance of the company during the period under report.
CG may prescribe an abridged Board's report. However, the concept of abridged Board
2. Contents of companies.
bar
applicable only to One Person Companics and
small
Report shall be
Board's Report it shall be a sufficient comnliana.
Thus, in case of a One Person Company and small company, nce
of a One Person if such company, instead of including all the contents given in points (a) to (q) above, inchudes
Company and only such contents in its Board's Report as have been prescribed by CG for the purpose of
small company abridged Board's Report.
(Abridged As per Rule 8A ofthe Companies (Accounts) Rules, 2014, the Board's Report of One Person Company
and Small Company shall be prepared based on the stand alone financial statement of the companv
Board's Report) which shall be in abridged form and contain the following:
(a) The web address, if any, where annual return (prepared as per section 92) has been placed
Sec. 134(3A)]
(b) Number of meetings of the Board
(c)Directors' Responsibility Statement
(d)Details in respect of frauds reported by auditors u/s 143(12) other than those which are reportable
to CG
(e) Explanations or comments by the Board on every qualification, reservation or adverse remark or
disclaimer made by the auditor in his repot
The state of the company's affairs
The financial summary or highlights
(h) Material changes from the date of closure of the financial year in the nature of business and theirl
effect on the financial position of the company
( The details of directors who were appointed or have resigned during the year
The details or significant and material orders passed by the Regulators or Courts or Tribunais
impacting the going concern status and company's operations in future
(K) he particulars of contracts or arrangements with related parties referred to in Sec. 188 in the
Form AOC-2.

3. Board's Report In case of a

One Person Company, Board's Report shall mean a report containing explanations
in case of One or comments by the Board on every qualification, reservation or adverse remark or disclaimer
made by the auditor in his
Person Company report.
. Laying of Board's Report shall be attached to the FS and shall be laid before the company in AGM.
Board's report
Signing of (a) The Board's report and any thereto shall be signed by
annexures -

Board's Report ) the chairperson of the company, if he is authorised by the Board, or

(11) at least 2 directors, one of whom shall be a
the company is not
managing director, if the chairperson opf
so authorised.
ln case there is only one director, the Board's report and any annexures thereto shall be
signed by such director.