Companies Act Section 131 — Voluntary revision of financial statements or Board’s report

CHAPTER IX ACCOUNTS OF COMPANIES

Commercial / Corporate

Summary

Sub-section (1) allows the directors of a company to prepare a revised financial statement or a revised Board’s report if they find that the original ones do not comply with the requirements of section 129 or section 134. This revision can only be done for any of the three preceding financial years, and only after the company gets approval from the Tribunal by making an application in the prescribed form and manner. A copy of the Tribunal’s order must be filed with the Registrar.

Before passing any order under this section, the Tribunal must give notice to the Central Government and the Income-tax authorities, and it must consider any representations they make. Also, such a revised financial statement or report cannot be prepared or filed more than once in a single financial year. Additionally, the detailed reasons for the revision must be disclosed in the Board’s report for the financial year in which the revision is being made.

Sub-section (2) states that if copies of the previous financial statement or report have already been sent to members, delivered to the Registrar, or laid before the company in a general meeting, then the revision must be limited to two things. First, it can only correct the specific issues where the previous statement or report failed to comply with section 129 or section 134. Second, it can make any necessary consequential changes that follow from those corrections.

Sub-section (3) gives the Central Government the power to make rules about how the provisions of this Act apply to a revised financial statement or a revised director’s report. These rules may, in particular, make different provisions depending on whether the previous statement or report is replaced entirely or is supplemented by a separate document showing the corrections. The rules may also address the role of the company’s auditor in relation to the revised statement or report, and they may require the directors to take certain steps as prescribed.

Official Text

(1) 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 or section 134 they may prepare revised financial statement or a revised report in respect of any of the three preceding financial years after obtaining approval of the Tribunal on an application made by the company in such form and manner as may be prescribed and a copy of the order passed by the Tribunal shall be filed with the Registrar:

Provided that the Tribunal shall give notice to the Central Government and the Income-tax authorities and shall take into consideration the representations, if any, made by that Government or the authorities before passing any order under this section:

Provided further that such revised financial statement or report shall not be prepared or filed more than once in a financial year:

Provided also that the 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.

(2) Where copies of the previous financial statement or report have been sent out to members or delivered to the Registrar or laid before the company in general meeting, the revisions must be confined to—

(a) the correction in respect of which the previous financial statement or report do not comply with the provisions of section 129 or section 134; and

(b) the making of any necessary consequential alternation.

(3) The Central Government may make rules as to the application of the provisions of this Act in relation to revised financial statement or a revised director's report and such rules may, in particular—

(a) make different provisions according to which the previous financial statement or report are replaced or are supplemented by a document indicating the corrections to be made;

(b) make provisions with respect to the functions of the company's auditor in relation to the revised financial statement or report;

(c) require the directors to take such steps as may be prescribed.