129. Financial statement
(1) The financial statements shall give a true and fair view of the state of affairs
of the company or companies, comply with the accounting standards notified under section
133 and shall be in the form or forms as may be provided for different class or classes of
companies in Schedule III:
Provided that the items contained in such financial statements shall be in accordance
with the accounting standards:
Provided further that nothing contained in this sub-section shall apply to any insurance
or banking company or any company engaged in the generation or supply of electricity, or to
any other class of company for which a form of financial statement has been specified in or
under the Act governing such class of company:
Provided also that the financial statements shall not be treated as not disclosing a true
and fair view of the state of affairs of the company, merely by reason of the fact that they do
not disclose—-
(a) in the case of an insurance company, any matters which are not required to be
disclosed by the Insurance Act, 1938, or the Insurance Regulatory and Development
Authority Act, 1999;
(b) in the case of a banking company, any matters which are not required to be
disclosed by the Banking Regulation Act, 1949;
(c) in the case of a company engaged in the generation or supply of electricity,
any matters which are not required to be disclosed by the Electricity Act, 2003;
(d) in the case of a company governed by any other law for the time being in
force, any matters which are not required to be disclosed by that law.
(2) At every annual general meeting of a company, the Board of Directors of the
company shall lay before such meeting financial statements for the financial year.
(3) Where a company has one or more subsidiaries, it shall, in addition to financial
statements provided under sub-section (2), prepare a consolidated financial statement of the
company and of all the subsidiaries in the same form and manner as that of its own which
shall also be laid before the annual general meeting of the company along with the laying of
its financial statement under sub-section (2):
Provided that the company shall also attach along with its financial statement, a separate
statement containing the salient features of the financial statement of its subsidiary or
subsidiaries in such form as may be prescribed:
Provided further that the Central Government may provide for the consolidation of
accounts of companies in such manner as may be prescribed.
Explanation.—For the purposes of this sub-section, the word “subsidiary” shall include
associate company and joint venture.
(4) The provisions of this Act applicable to the preparation, adoption and audit of the
financial statements of a holding company shall, mutatis mutandis, apply to the consolidated
financial statements referred to in sub-section (3).
(5) Without prejudice to sub-section (1), where the financial statements of a company
do not comply with the accounting standards referred to in sub-section (1), the company
shall disclose in its financial statements, the deviation from the accounting standards, the
reasons for such deviation and the financial effects, if any, arising out of such deviation.
(6) The Central Government may, on its own or on an application by a class or classes of
companies, by notification, exempt any class or classes of companies from complying with any
of the requirements of this section or the rules made thereunder, if it is considered necessary to
grant such exemption in the public interest and any such exemption may be granted either
unconditionally or subject to such conditions as may be specified in the notification.
(7) If a company contravenes the provisions of this section, the managing director, the
whole-time director in charge of finance, the Chief Financial Officer or any other person charged
by the Board with the duty of complying with the requirements of this section and in the
absence of any of the officers mentioned above, all the directors shall be punishable with
imprisonment for a term which may extend to one year or with fine which shall not be less than
fifty thousand rupees but which may extend to five lakh rupees, or with both.
Explanation.—For the purposes of this section, except where the context otherwise
requires, any reference to the financial statement shall include any notes annexed to or
forming part of such financial statement, giving information required to be given and allowed
to be given in the form of such notes under this Act.