Section 129 of CA 2013 : Section 129: Financial Statement

Explanation using Example

Imagine XYZ Pvt. Ltd. is a company that has just concluded its financial year and is preparing its financial statements. According to Section 129 of The Companies Act, 2013, the company must ensure that these financial statements present a true and fair view of its financial situation and comply with the accounting standards prescribed under section 133.

As XYZ Pvt. Ltd. is not an insurance, banking, or electricity company, it must follow the general form and contents for financial statements as provided in Schedule III of the Act. However, if XYZ Pvt. Ltd. had been any of these types of companies, it could have omitted certain disclosures as per their respective governing laws without compromising the true and fair view of its financial statements.

At the upcoming annual general meeting, the Board of Directors of XYZ Pvt. Ltd. will present the financial statements for the past financial year to the shareholders for their approval.

Moreover, if XYZ Pvt. Ltd. had subsidiaries, it would also need to prepare consolidated financial statements including all subsidiaries and present them at the annual general meeting, along with a separate statement highlighting key features of the subsidiaries' financial statements.

If XYZ Pvt. Ltd. decided to deviate from the accounting standards for some reason, it would need to disclose the deviation, its reasons, and the financial impact of this deviation in its financial statements.

Lastly, if XYZ Pvt. Ltd. fails to comply with Section 129, the responsible officers or directors could face penalties including fines or even imprisonment.