Section 134: Financial statement, Board’s report, etc

Section 134: Financial statement, Board’s report, etc · Complied AI

(3)

There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include—

(a)

the extract of the annual return as provided under sub-section ( 3 ) of section 92;

(a)

the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed;

(b)

number of meetings of the Board;

(c)

Directors’ Responsibility Statement;

(ca)

details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government;

(d)

a statement on declaration given by independent directors under sub-section ( 6 ) of section 149;

(e)

in case of a company covered under sub-section ( 1 ) of section 178, company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section ( 3 ) of section 178;

(f)

explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made—

(i)

by the auditor in his report; and

(ii)

by the company secretary in practice in his secretarial audit report;

(g)

particulars of loans, guarantees or investments under section 186;

(h)

particulars of contracts or arrangements with related parties referred to in sub-section ( 1 ) of section 188 in the prescribed form;

(i)

the state of the company’s affairs;

(j)

the amounts, if any, which it proposes to carry to any reserves;

(k)

the amount, if any, which it recommends should be paid by way of dividend;

(l)

material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report;

(m)

the conservation of energy, technology absorption, foreign exchange earnings and outgo, in such manner as may be prescribed;

(n)

a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company;

(o)

the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;

(p)

in case of a listed company and every other public company having such paid-up share capitalas may be prescribed, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors annual evaluation of the performance of the Board, its Committees and of individual directors has been made;

(q)

such other matters as may be prescribed.

Proviso

Provided that where disclosures referred to in this sub-section have been included in the financial statements, such disclosures shall be referred to instead of being repeated in the Board’s report:

Proviso

Provided further that where the policy referred to in clause (e) or clause (o) is made available on company’s website, if any, it shall be sufficient compliance of the requirements under such clauses if the salient features of the policy and any change therein are specified in brief in the Board’s report and the web-address is indicated therein at which the complete policy is available.

Proviso

Provided that in case of a Specified IFSC public company, if any information listed in this sub-section is provided in the financial statement, the company may not include such information in the report of the Board of Directors.

Proviso

Provided that in case of a Specified IFSC private company, if any information listed in this sub-section is provided in the financial statement,the company may not include such information in the report of the Board of Directors.

Notes, amendments & references (29)

Substituted vide Companies (Amendment) Act, 2017 dated 03.01.2018, w.e.f., 31.07.2018. To view the notification, Click Here

Explanation. – For the purposes of this Act, the term ‘start-up’ or “start-up company” means a private company incorporated under the Companies Act, 2013 (18 of 2013) or the Companies Act, 1956 (1 of 1956) and recognised as start-up in accordance with the notification issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.

Board of Directors 2(10) Board of Directors , in relation to a company, means the collective body of the directors of the company

managing director 2(54) M anaging Director means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called.

Explanation .—For the purposes of this clause, the power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within the substantial powers of management .

Chief Executive Officer 2(18) Chief Executive Officer means an officer of a company, who has been designated as such by it

Chief Financial Officer 2(19) Chief Financial Officer means a person appointed as the Chief Financial Officer of a company

Company Secretary 2(24) Company Secretary means a company secretary as defined in clause(c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) who is appointed by a company to perform the functions of a company secretary under this Act.

One Person Company 2(62) One Person Company means a company which has only one person as a member

It is clarified by MCA that the financial statements (and documents required to be attached thereto), auditors report and Board’s report in respect of financial years that commenced earlier than 1st April, 2014 shall be governed by the relevant provisions/Schedules/rules of the Companies Act, 1956 vide Circular 08/2014 dated 04 April 2014. To view the clarification, Click Here

MCA has constituted a Committee to finalise Business Responsibility Reporting Format for Listed and Unlisted Companies Vide Office Order dated 14.11.2018. To view the Order, Click Here

Substituted vide Companies (Amendment) Act, 2017 dated 03.01.2018 w.e.f., 31.07.2018. To view the notification, Click Here

Inserted by the Companies (Amendment) Act, 2015 (21 of 2015), notified on 26th May, 2015, with effect from 29th May 2015 vide notification S.O. 1440(E).To view the notification, Click Here

clause (e) of sub-section (3) of section 134 shall not apply to a Government Company, vide notification dated 5th June, 2015.

(The exceptions, modifications and adaptations provided above shall be applicable only to those Government Companies which has not committed a default in filing its financial statements under section 137 of the said act or annual return under section 92 of the said act with the registrar, vide notification dated 13th June, 2017)

To view the notification, Click Here

Refer rule 8 and Form No. AOC 2 of the Companies (Accounts) Rules,2014. To view the rule, Click Here

Refer Rule 8 of The Companies (Accounts)Rules,2014.To view the rule, Click Here

Refer Clarification on offsetting the excess CSR spent for FY 2019-20 dated 20.05.2021. To view the clarification, Click Here

Shall not apply to Government Company in case the direction are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the Company, or, as the case may be, the State Government as per its own evaluation methodology, vide notification GSR 463 (E) dated 5th June, 2015

Shall not apply to Government Company in case the directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the Company, or, as the case may be, the State Government as per its own evaluation methodology vide notification GSR 463 (E). To view the notification, Click Here

Refer Sub-rule(4) of Rule 8 of the Companies (Accounts) Rules,2014. To view the Rule, Click Here

Provided that Inserted vide Companies (Amendment) Act, 2017 dated 03.01.2018 w.e.f., 31.07.2018. To view the notification, Click Here

Provided further that Inserted vide Companies (Amendment) Act, 2017 dated 03.01.2018 w.e.f., 31.07.2018. To view the notification, Click Here

Provided Inserted vide Exemption Notification to specified IFSC Public Companies, GSR 08 (E) dated 04.01.2017. To view the notification Click Here

Provided Inserted vide Exemption Notification to specified IFSC Private Companies, GSR 09 (E) dated 04.01.2017. To view the notification Click Here

Inserted vide Companies (Amendment) Act, 2017 dated 03.01.2018 w.e.f., 31.07.2018 . To view the notification, Click Here

Substituted vide Companies (Amendment) Act, 2020 dated 28.09.2020 with effect from 21.12.2020. To view the Act, Click Here . To view the commencement notification, Click Here .

officer 2(59) Officer includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act