Voluntary Revision of the Financial Statement under Companies Act, 2013: 7 Major Takeaways
July 13, 2017 by Sanjoli Singh
As per Section 131 of the Companies Act, if it appears to the directors of a company that—
(a) the financial statement of the company; or
(b) the report of the Board,
- do not comply with the provisions of section 129 (Financial Statement) or section 134 (Board’s Report)
- they may prepare revised financial statement or a revised report in respect of any of the three preceding financial years
SEVEN MAJOR TAKEAWAYS
- Approval of the Tribunal(NCLT) is required.
- Petition to the NCLT is to be advertised in Newspaper.
- The Tribunal may issue notice to Central Government (RD) and Income Tax Authority for their respective representations, if any(Chemtex Materials Private Limited dated 4/07/2017 NCLT Ahmadabad).
- The Tribunal shall issue notice and may hear the auditor of the original financial statement.
- In case the majority ofdirectors has been changed before the decision is taken to apply under section 131, the company shall disclose the fact in the application.
- Such revised financial statement or report shall not be prepared or filed more than once in a financial year.
- Detailed reasons for revision of such financial statement or report shall also be disclosed in the Board’s report in the relevant financial year in which such revision is being made.
PROCEDURE FOR REVISION OF FINANCIAL STATEMENT IN ACCORDANCE WITH THE NCLT RULES 2016
- Hold board meeting and pass the following resolutions
- To consider In- Principal approval for revision of financial statement or Board Report of the Company
- To authorize Company Secretary in practice or other professional to enter appearance before NCLT
- An application shall be filed in Form No. NCLT-1within fourteen daysof the decision taken by the Board. (Rule 77 of NCLT RULES)
- In case the majority of directors has been changed before the decision is taken to apply under section 131, the company shall disclose the fact in the application.
- The Application shall also set forth the following particulars, namely:-
- Where such accounts are audited the name and contact details of the auditor or any former auditor who audited such account
- Grounds for seeking revision of the financial statement or board’s report
- The company shall atleast 14 days before the hearing advertise the application in accordance with Rule 35
- The Tribunal shall issue notice and may hear the auditor of the original financial statement, if present auditor is different and after considering the application and hearing the auditor and any other person as the Tribunal may deem fit, may pass appropriate order in the matter.
- A certified copy of the order of the Tribunal shall be filed with the Registrar of Companies within thirty days of the date of receipt of the certified copy in INC – 28(Rule 77(6) of NCLT Rules, 2016).
- A general meeting to be called and notice of such general meeting along with reasons for change in financial statements may be published in newspaper in English and in vernacular language (Rule 77(7) of NCLT Rules, 2016).
- In general meeting, the revised financial statements, statement of directors and the statement of auditors to be put up for consideration before a decision is taken on adoption of the revised financial statements (Rule 77(8) of NCLT Rules, 2016).