[Case Study] Submission of provisional financial statements when financials are not adopted in AGM

[2022] 144 taxmann.com 88 (Article)

Financial statements

Section 129 of Companies Act, 2013 spells out about the preparation of a financial statement. Financial statements are the written records that convey business activities and the financial performance of the company. Financial statement includes the balance sheet, profit and loss account/income, expenditure account, cash flow statement of changes in equity etc. Section 129 provides that the financial statements shall have to give a true and fair view of the current condition of the company and to state that reports shall comply with the accounting standards mentioned as per section 133 of the Companies Act 2013. The financial statements are required to be prepared in the form as prescribed in schedule III of the Companies Act, 2013.

Filing of adopted financial Statement of companies

According to the provisions of section 137, subsection (1), one copy of the financial statements, including consolidated financial statement, if any, together is required to be filed with the Registrar of Companies along with the all the mandatory enclosures duly adopted at the annual general meeting of the company. Within 30 days of the date of the annual general meeting, financial statements are required to be filed along with the annexures. For standalone statements, Rule 12 has prescribed Form AOC-4 (for standalone statements) and AOC-4 CFS (for consolidated statements). Forms are required to be filed in Extensible Business Reporting Language (XBRL) format.

Filing of un-adopted financial statements of companies

First proviso to section 137 subsection (1) provides that in case where the financial statements are not adopted in annual general meeting, such unadopted financial statements along with the documents which are required to be annexed to the financial statement are required to be filed with the Registrar of Companies within 30 days from the date of annual general meeting. Such filings will be taken on record as provisional till the filing of the adopted financial statements. The following are the relevant provisions of the companies Act 2013 on this matter.

Provisions of Companies Act 2013

Given below are the relevant provisions of Companies Ac! 2013 relating filing of financial statements of a company when the financial Statement of companies adopted at the annual general meeting of the company by the members.

Section 137 (1) of the Companies Act, 2013

A copy of the financial statements, including consolidated financial statement, if any,
along with all the documents which are required to be or attached to such financial statements under this Act duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed.

Provided that where the financial statements under sub-section (1) are not adopted at annual general meeting or adjourned annual general meeting, such un-adopted financial statements along with the required documents under sub-section (1) shall be fled with the Registrar within thirty days of the date of annual general meeting and the Registrar shall take them in his records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose.

Provided further that financial statements adopted in the adjourned annual general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed.

Provided also that a One Person Company (OPC) shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year:

Provided also that a company shall, along with its financial statements to be filed with the Registrar, attach the accounts of its subsidiary or subsidiaries which have been incorporated outside India and which have not established their place of business in India.

Provided also that in the case of a subsidiary which has been incorporated outside India (herein referred to as ‘foreign subsidiary”), which is not required to get its financial statement audited under any law of the country of its incorporation and which does not get such financial statement audited, the requirements of the fourth proviso shall be met if the holding Indian company files such unaudited financial statement along with a declaration to this effect and where such financial statement is in a language other than English, along with a translated copy of the financial statement in English.

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