Section 129 of the Companies Act, 2013

Section 129 of the Companies Act, 2013 deals with the Financial Statements of a company — how they should be prepared, what they should contain, and the standards they must follow.

📘 Section 129 – Financial Statement

1. Preparation of Financial Statements [Sub-section (1)]

Every company must prepare financial statements:

For each financial year;

That give a true and fair view of the state of affairs;

In compliance with accounting standards notified under Section 133;

In the form provided in Schedule III of the Act.

Financial statements must be laid before the company at the Annual General Meeting (AGM).

📄 "Financial Statement" includes:

As per Section 2(40):

Balance sheet,

Profit and loss account (or income & expenditure account for non-profits),

Cash flow statement (except for certain companies),

Statement of changes in equity (if applicable),

Any explanatory note forming part of the above.

2. Consolidated Financial Statements [Sub-section (3)]

If a company has subsidiaries (including associates or joint ventures), it must also prepare consolidated financial statements (CFS) and lay them before the AGM along with the standalone financials.

3. Compliance and Penalty [Sub-section (7)]

If a company fails to comply with Section 129:

The company, its Managing Director, Whole-Time Director in charge of finance, CFO, or other responsible persons can be punished with:

Imprisonment up to 1 year, or

Fine between ₹50,000 to ₹5,00,000, or

Both.

📌 Key Notes:

Must be approved by the Board of Directors before being signed and laid before the AGM.

Must be filed with the Registrar in prescribed forms (e.g., AOC-4).

 

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