{"id":80681,"date":"2023-11-20T12:43:18","date_gmt":"2023-11-20T07:13:18","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?post_type=act&#038;p=80681"},"modified":"2023-11-20T12:43:21","modified_gmt":"2023-11-20T07:13:21","slug":"section-134","status":"publish","type":"act","link":"https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/","title":{"rendered":"Section 134. Financial Statement, Board\u2018S Report, Etc"},"content":{"rendered":"\n<p><span id='easy-footnote-1-80681' class='easy-footnote-margin-adjust'><\/span><span class='easy-footnote'><a href='https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/#easy-footnote-bottom-1-80681' title='Subs. by Act 1 of 2018, s. 36 (w.e.f. 31-7-2018).'><sup>1<\/sup><\/a><\/span>[(1) The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director, if any, and the Chief Executive Officer, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of One Person Company, only by one director, for submission to the auditor for his report thereon.]<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(2) The auditors report shall be attached to every financial statement.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(3) There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include&#8211;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><span id='easy-footnote-2-80681' class='easy-footnote-margin-adjust'><\/span><span class='easy-footnote'><a href='https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/#easy-footnote-bottom-2-80681' title='Subs by Act 1 of 2018, s. 36, for clause (a) (w.e.f. 31-7-2018).'><sup>2<\/sup><\/a><\/span>[(a) the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed;]<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(b) number of meetings of the Board;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(c) Directors Responsibility Statement;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><span id='easy-footnote-3-80681' class='easy-footnote-margin-adjust'><\/span><span class='easy-footnote'><a href='https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/#easy-footnote-bottom-3-80681' title='Ins. by Act 21 of 2015, s. 12 (w.e.f. 29-5-2015).'><sup>3<\/sup><\/a><\/span>[(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;]<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(d) a statement on declaration given by independent directors under sub-section (6) of section 149;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(e) in case of a company covered under sub-section (1) of section 178, companys 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;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(f) explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made&#8211;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(i) by the auditor in his report; and<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(ii) by the company secretary in practice in his secretarial audit report;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(g) particulars of loans, guarantees or investments under section 186;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(h) particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(i) the state of the companys affairs;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(j) the amounts, if any, which it proposes to carry to any reserves;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(k) the amount, if any, which it recommends should be paid by way of dividend;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(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;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(m) the conservation of energy, technology absorption, foreign exchange earnings and outgo, in such manner as may be prescribed;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(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;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(o) the details about the policy developed and implemented by the company incorporate social responsibility initiatives taken during the year;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(p) in case of a listed company and every other public company having such paid-up share capital as may be prescribed, a statement indicating the manner in which formal\u00a0<span id='easy-footnote-4-80681' class='easy-footnote-margin-adjust'><\/span><span class='easy-footnote'><a href='https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/#easy-footnote-bottom-4-80681' title='Subs. by Act 1 of 2018, s. 36 for &amp;#8220;annual evaluation has been made by the Board of its own performance and that of its committees and individual directors&amp;#8221; (w.e.f. 31-7-2018).'><sup>4<\/sup><\/a><\/span>\u00a0annual evaluation of the performance of the Board, its Committees and of individual directors has been made;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(q) such other matters as may be prescribed:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><span id='easy-footnote-5-80681' class='easy-footnote-margin-adjust'><\/span><span class='easy-footnote'><a href='https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/#easy-footnote-bottom-5-80681' title='The provisos ins. by s. 36, ibid., (w.e.f. 31-7-2018).'><sup>5<\/sup><\/a><\/span>[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&#8217;s report:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>Provided further that where the policy referred to in clause (e) or clause (o) is made available on company&#8217;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&#8217;s report and the web-address is indicated therein at which the complete policy is available.]<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><span id='easy-footnote-6-80681' class='easy-footnote-margin-adjust'><\/span><span class='easy-footnote'><a href='https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/#easy-footnote-bottom-6-80681' title='Sub-section (3A) ins. by s. 36, ibid., (w.e.f. 31-7-2018).'><sup>6<\/sup><\/a><\/span>[(3A) The Central Government may prescribe an abridged Board&#8217;s report, for the purpose of compliance with this section by One Person Company or small company.]<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(4) The report of the Board of Directors to be attached to the financial statement under this section shall, in case of a One Person Company, 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.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(5) The Directors Responsibility Statement referred to in clause (c) of sub-section (3) shall state that&#8211;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud another irregularities;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(d) the directors had prepared the annual accounts on a going concern basis; and<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><em>Explanation.<\/em>&#8212; For the purposes of this clause, 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 companys 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;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(6) The Boards report and any annexures thereto under sub-section (3) shall be signed by its chairperson of the company if he is authorised by the Board and where he is not so authorised, shall be signed by at least two directors, one of whom shall be a managing director, or by the director where there is one director.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(7) A signed copy of every financial statement, including consolidated financial statement, if any, shall be issued, circulated or published along with a copy each of&#8211;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(a) any notes annexed to or forming part of such financial statement;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(b) the auditors report; and<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>(c) the Boards report referred to in sub-section (3).<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><span id='easy-footnote-7-80681' class='easy-footnote-margin-adjust'><\/span><span class='easy-footnote'><a href='https:\/\/enterslice.com\/learning\/act\/companies-act-2013\/section-134\/#easy-footnote-bottom-7-80681' title='Subs. by Act 29 of 2020, s. 26, for sub-section (8) (w.e.f. 21-12-2020).'><sup>7<\/sup><\/a><\/span>[(8) If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[(1) The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director, if any, and [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":79763,"parent":79755,"menu_order":0,"template":"","format":"standard","meta":[],"categories":[11445],"tags":[1007],"acf":{"service_id":"215"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Section 134. 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