129 Financial Statement

Notified Date of Section: 01/04/2014

¹[129.(1) The financial statements shall give a true and fair view of the state of affairsof the company or companies, comply with the accounting standards notified undersection133and shall be in the form or forms as may be provided for different class or classes ofcompanies inSchedule III:

Provided that the items contained in such financial statements shall be in accordancewith the accounting standards:

Provided further that nothing contained in this sub-section shall apply to any insuranceor banking company or any company engaged in the generation or supply of electricity, or toany other class of company for which a form of financial statement has been specified in orunder the Act governing such class of company:

Provided also that the financial statements shall not be treated as not disclosing a trueand fair view of the state of affairs of the company, merely by reason of the fact that they donot disclose—-

(a) in the case of an insurance company, any matters which are not required to bedisclosed by the Insurance Act, 1938, or the Insurance Regulatory and DevelopmentAuthority Act, 1999;

(b) in the case of a banking company, any matters which are not required to bedisclosed 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 inforce, 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 thecompany shall lay before such meeting financial statements for the financial year.

²[(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 thefinancial statements of a holding company shall,mutatis mutandis,apply to the consolidatedfinancial statements referred to in sub-section

(5) Without prejudice to sub-section (1), where the financial statements of a companydo not comply with the accounting standards referred to in sub-section (1), the companyshall disclose in its financial statements, the deviation from the accounting standards, thereasons for such deviation and the financial effects, if any, arising out of such deviation.

³(6) The Central Government may, on its own or on an application by a class or classes ofcompanies, by notification, exempt any class or classes of companies from complying with anyof the requirements of this section or the rules made thereunder, if it is considered necessary togrant such exemption in the public interest and any such exemption may be granted eitherunconditionally 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, thewhole-time director in charge of finance, the Chief Financial Officer or any other person chargedby the Board with the duty of complying with the requirements of this section and in theabsence of any of the officers mentioned above, all the directors shall be punishable withimprisonment for a term which may extend to one year or with fine which shall not be less thanfifty thousand rupees but which may extend to five lakh rupees, or with both.

Explanation.—For the purposes of this section, except where the context otherwiserequires, any reference to the financial statement shall include any notes annexed to orforming part of such financial statement, giving information required to be given and allowedto be given in the form of such notes under this Act.]

Exception/ Modification/ Adaptation

1.In case of Government company - Section 129 shall not apply to the companies engaged in defence production to the extent of application of relevant Accounting Standard on segment reporting. -Notification dated 23rd February 2018

Note:-

The above is Substituted Exception by Notification dated 23rd February 2018 and the Original Exception was:-

Section 129 shall not apply to the extent of application of Accounting Standard 17 (Segment Reporting) to the companies engaged in defence production. - Notification dated 5th june, 2015.

3. Exemption to Government Companies under section 129(6) of Companies Act, 2013 from recognizing Deferred Tax Assets/ Deferred Tax Liability under AS-22/Ind AS-12 -Notification Dated 5th February 2018

Amendments:

2. Substituted by the Companies (Amendment) Act,2017 :- Amendment Effective From 7th May 2018

In section 129, for sub-section (3) for the words:

Where a company has one or more subsidiaries, 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 in the same form and manner as that of its own 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 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.

Explanation.—For the purposes of this sub-section, the word “subsidiary” shall include associate company and joint venture.

The following sub-section shall be substituted, namely :-

''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".