All About Signing of Financial Statement Of Company | RJA (2024)

All About Signing of Financial Statement Of Company

Brief Introduction

• The financial statement is one of the important documents of a corporate entity which is required to be prepare in every financial year and audited by the auditors of the corporate entity. The financial statement provides a summary of the company’s assets, Liabilities and shareholders’ equity.
• Financial statement is required to be prepared so that the shareholders can get an idea about the financial position and operation of the corporate.
• This information is utilized by the shareholders to gather information about the company’s performance and hence can make decisions whether to take a position in such company or not.
• Every company, whether private or public, is required to submit an annual financial statement with the ROC in form AOC-4 and MGT-7 (together with any appropriate attachments) within six months after the end of the relevant financial year.

Adoption of Financial Statements

• The company is required to adopt the financial statement within the AGM. The AGM of the corporate could be held within 6 months from the end of the relevant financial year i.e. 30th September.
• After signing the financial statement, including consolidated financial statement, if any, shall be circulated together with a copy each stakeholder.

Meaning & Definition of Financial Statements

Section 2 (40) ofthe companiesAct 2013 states that thefinancial statementincludesthe subsequentitems:

• Balance sheet;
• Profit and loss account, or in the case of a nonprofit organization, an income and expenditure account for the year
• Cash flow statement
• Statement in respect of changes in equity, and
• Annexure forming a part of the budget

Preparation of Financial Statemen

• The financial statement of the corporate shall be prepared in accordance with Schedule III of section 129 of the companies Act, 2013 and such plan laid before the shareholders at the Annual general meeting of the corporate.

Signing of Financial Statement

As per the provisions of Section 134 of Companies Act, 2013financial statementwould besigned by the following:

• • Chairperson of the corporate (if he’s authorized by the board of directors) or
  • By any 2 Directors of the said entity, one of which should be a Managing Director, and
  • Chief Executive Officer/ Company Secretary/ Chief financial officer of the corporate (on the basis of their appointment within the Company.

Note: Chairperson of the corporate can sign the financial statements after authorized by the Board of directors regardless of whether he chaired the meeting or not.

The signed financial statement submitted to the auditor then the auditor shall prepare an Auditors’ report and also the same shall be attached to the financial statement.

Adoption & Circulation of Financial Statement

Financial Statement must be adopted by the firm at the Annual General Meeting. The company’s Annual General Meetingmay well beconvened within six months of the financial year’s end, on September 30th.

Thefinancial statement, including any consolidated financial statements, shall be circulated after signing,along witha duplicateof eachof—

• the auditor’s report; and
• any notes or annexure

• the Board’s report

Board’s Report Content:

• CSR Policy & initiatives
• Address of Website ofthe corporate.
• Statement of the Company’s affairs.
• Details in respect of the Contracts or arrangements which have been entered into with the Related party, and the same be provided in Form No. AOC-2.
• Director’s Responsibility statement.
• Details in respect of activity undertaken for the conservation or renewal of energy, technology andinformation on the foreign exchange.
• Policy on Remuneration & Director’s Appointment.
• Any sought of adverse remarks, being received from the Secretarial Auditor in the Report or bythe internal auditor, along with their respective comment with regard to the remarks which have been made by the Board of Directors of the entity.
• Details of fraud Reported by auditor.
• Statement of Annual Evaluation

• Declaration by Independent Directors.

• No of Board Meetings.

• Details of guarantees, loans or Investments.

•Amount carrying reserves or paid by Dividend.

• CSR Policy and initiatives.

Requirement of Directors Signature

The financial statement of the corporate is required to sign by two directors out of which one shall be managing director or by one director if the corporate has just one director.

Mandatory Signature of CompanySecretary

• As per Section 134(1),the corporatewithin whichthe Whole-time Company Secretary is appointed, thenit’smandatory that thefinancial statementis signed from the Whole-time Company Secretary. Further ifthe corporateappointed Chiefexecutive officeror Chieffinancial officerthen thefinancial statementshalleven besigned from them.
• Where the corporate doesn’t have a CFO and CS then only chairman can sign the financial statement. Where the corporate doesn’t have a chairperson or not authorized by the board, signing of financial statements by two directors one of which shall be managing director and the CFO, if he’s a director.

Signingof Financials in OPC

Financial statement of One Person Company shall be signed by only one director.

Electronic Signing of Financial Statements

The financial statement of the businesses can also be signed electronically with the Digital Signature of the directors, Chief Executive Officer/ Company Secretary/ Chief financial officer and also the Statutory Auditors of the corporate.

Date of Signing of Financial Statements

The date of signing of financial Statement including balance sheet, Profit & Loss, cash flow Statement and other supporting Documents shall be the date which may either be before the date of signing of Audit report or can be the actual date of signing of audit report by the auditor.

Signing Dates of Financial Statements by Directors & Auditors

• The financial statements of the corporate after signed by the directors send to the Auditors for signing. Generally, it is observed that the auditors and directors sign the financial statement at different places and hence, the same tends to be undertaken at different dates.
• This means that the date of signing of financials by the auditors may be different from the date of signing by the directors.
• When the financial statement of the corporate is signed by both the directors and also by the Auditor, then the same be adopted by the shareholders within the Annual General Meeting of the corporate.

Approvalof FinancialStatement

As per the provisions of Section 134(1)financial statementofthe corporateshall be approved by the board of Directors in its meeting and signed on behalf of the board.

Financial Statement Can be revised

Company is only allowed to file a revised Financial Statementonce every FY. After receiving an order from the Tribunal, the Company can file a revised Financial Statement with ROC, together with a copy of the ruling, provided that the Company can update the financial statements for any of the previous 3 Financial Years.

There is two kind of Financial Statement Can be revised like Compulsory Revision & Voluntary Revision

Different of Compulsory Revision Vs Voluntary Revision

Conclusion

• In accordance with the Section 134 ofthe companiesAct, 2013financial statementofthe corporatemust besignedaccordance withthe rulesandprovisions of the Act.it’smandatoryfor each and everycompany to follow the provisions of the Act.
• If the corporate fails to accommodates the provisions of signing of financial statements as mentioned within the Act, then the corporate shall be at risk of a penalty of INR 3 lakh and apart from this, each officer of the corporate who is in default shall be prone to a penalty of fifty thousand rupees and the concerned directors / officers of the corporate become liable to fine / imprisonment / both.

MCA Update as on 24 Jan 2022

• Annual General Meeting of company can be held 30.11.2021 as per AGM Extension provided by the MCA. Accordingly shorter notice agm can be done on 30.11.2021,
• Balance sheet can be signed lastly on 30.11.2021. UDIN is to be generated with 60 days of signing of balance sheet.
• Last date to generate UDIN is 28.01.2022 for signing the balance sheet.

Revised-schedule III to the companies Act 2013

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