Accounts of Companies

(a)(i) According to section 128 of the Companies Act, 2013, every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting.

Provided that all or any of the books of account aforesaid and other relevant papers may be kept at such other place in India as the Board of Directors may decide and where such a decision is taken, the company shall, within seven days thereof, file with the Registrar a notice in writing giving the full address of that other place.

Provided further that the company may keep such books of account or other relevant papers in electronic mode in such manner as may be prescribed.

In the present question, although the Board of Directors of Sunrise Infra Limited decided to maintain the books at its Pune office, the company failed to file Form AOC-5 within seven days. Hence, the company has not complied with requirement of section 128.

As per Rule 3(1) of the Companies (Accounts) Rules, 2014, for financial years commencing on or after 1 April 2023, accounting software used for maintaining books of account must have an audit trail/edit log facility and the audit trail should not be capable of being disabled.

Since the software used by the company does not preserve an audit trail, the company has also not complied with Rule 3(1) of the Companies (Accounts) Rules, 2014.

In addition, under section 128(3), the books of account and other books and papers maintained by the company within India shall be open for inspection at the registered office of the company or at such other place in India by any director during business hours, and in the case of financial information, if any, maintained outside the country, copies of such financial information shall be maintained and produced for inspection by any director subject to prescribed conditions.

The company's failure to furnish the Dubai branch information for more than one month indicates non-compliance with the applicable requirement.

Further, section 128(5) requires books of account relating to not less than eight financial years immediately preceding the financial year, together with relevant vouchers, to be kept in good order.

Since the company preserved the books and vouchers only for five years, it has not complied with the prescribed retention period.

Thus, Sunrise Infra Limited has not complied with the provisions relating to maintenance and preservation of books of account.

(ii)Voluntary Revision of Financial Statements [Section 131]: If it

appears to the directors of a company that the financial statement of the company; or 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.

Therefore, the directors' proposal to revise the accounts for the previous four financial years and without approaching the Tribunal is incorrect and against the legal requirements.

Non-Preparation of Financial statements in compliance with

Accounting Standards [Section 129(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.

The non-preparation of the financial statements in compliance with Accounting Standards a significant violation of legal requirement under the Companies Act, 2013.

Non-Disclosure of Accounting Standard Deviations [Section

129(5)]: As per the law, if a company's financial statements deviate from the prescribed accounting standards, it must explicitly disclose:

•The specific deviation

•The reasons behind such a deviation

•The financial effects (if any) arising out the such deviation

The non-disclosure of the accounting standard deviations by the company is completely improper and constitutes a significant violation of legal requirement under the Companies Act, 2013.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, September 2026, 4(a) (New Scheme).

(a)According to first proviso to section 137(1) of the Companies Act, 2013, where the financial statements are not adopted at Annual General Meeting (AGM) or adjourned AGM, such unadopted financial statements along with the required documents shall be filed 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.

According to second proviso to section 137(1) of the Companies Act, 2013, financial statements adopted in the adjourned AGM shall be filed with the Registrar within thirty days of the date of such adjourned AGM with such fees or such additional fees as may be prescribed.

In the instant case, the accounts of Paras Limited were adopted at the adjourned AGM held on 20th September, 2025 and filing of financial

statements with Registrar was done on 29th September, 2025 i.e. within 30 days of the date of adjourned AGM.

However, Paras Limited has not filed its unadopted financial statements within 30 days of the date of the Annual General Meeting held on 17th August, 2025.

Hence, Paras Limited has not complied with the statutory requirement regarding filing of unadopted accounts with the Registrar, but has certainly complied with the provisions by filing of adopted accounts within the due date with the Registrar.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, September 2026, 6(a) (New Scheme).

(b)(i) According to section 131(1) of the Companies Act, 2013 read with Rule 77 of the National Company Law Tribunal Rules, 2016, 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 Form No. NCLT-1 within fourteen days of the decision taken by the Board and a certified copy of the order passed by the Tribunal shall be filed with the Registrar within 30 days of the date of receipt. Such revision of the financial statements and reports shall not be prepared or filed more than once in a financial year.

However, such revision cannot be done merely by passing a Board Resolution. The company can revise the financial statements and Board’s Report only:

•after obtaining approval of the Tribunal; and

•the revision can be made only for any of the three preceding

financial years.

In the given question, the company failed to disclose a contingent liability of ₹ 2.50 crore relating to a suit for breach of contract. Such

non-disclosure affected the true and fair view of the state of affairs of the company. Therefore, the company is justified in proposing revision of the financial statements and the Board’s Report for the financial year ended 31st March, 2024.

Since the Board Meeting was held on 15th May, 2025 for revision of

the financial statements and the Board’s Report relating to the financial year 2023-24, it was well within the permissible preceding three financial years.

(ii)According to Rule 77(3) of the National Law Tribunal Rules, 2016, the application for voluntary revision of financial statements shall, inter alia , set forth the following particulars, namely:

(a)Financial year or period to which such accounts relates;

(b)the name and contact details of the Managing Director, Chief Financial Officer, directors, Company Secretary and officer of the company responsible for making and maintaining such books of accounts and financial statement;

(c)where such accounts are audited, the name and contact details of the auditor or any former auditor who audited such accounts;

(d)copy of the Board resolution passed by the Board of Directors;

(e)grounds for seeking revision of financial statement or Board's Report.

Further Rule 77(2) provides that in case the majority of the directors of company or the auditor of the company has been changed immediately before the decision is taken to apply under section 131, the company shall disclose such facts in the application.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2026, 1(b) (New Scheme).

(b)According to Rule 3 of the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015, the following class of companies shall file their financial statements and other documents under section 137 of the Act with the Registrar in e-form AOC-4 XBRL - as per Annexure I -

(i)companies listed with stock exchanges in India and their Indian subsidiaries;

(ii)companies having paid up capital of five crore rupees or above;

(iii)companies having turnover of one hundred crore rupees or above;

(iv)all companies which are required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules, 2015.

In the given case RMP Private Ltd., is an unlisted company having paid up share capital of ₹ 6 crore and Annual Turnover of ₹ 90 crore. Hence, in line

with above requirements RMP Private Ltd. is required to file its financial statements for the financial year 2024-2025 in e-form AOC-4 XBRL since it is having paid up capital of five crore rupees or above.

Therefore, it can be concluded that RMP Private Ltd. has not complied with the applicable legal provisions.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, January 2026, 6(b) (New Scheme).

(a)As per section 123(3) of the Companies Act, 2013, the Board of Directors of a company may declare interim dividend during any financial year out of the surplus in the profit and loss account and out of profits of the financial year in which such interim dividend is sought to be declared.

Provided that in case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during the immediately preceding three financial years.

According to the given facts, XYZ Ltd. is facing losses in business during the first and second quarter of financial year 2023-2024. In the immediately preceding three financial years, the company declared dividend at the rate of 15%, 15% and 30% respectively. Accordingly, the rate of dividend declared shall not exceed 20%, the average of the rates (15+15+30=60/3) at which dividend was declared by it during the immediately preceding three financial years.

Therefore, the act of the Board of Directors as to declaration of interim dividend at the rate of 30% during the F.Y. 2023-2024 is not valid.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, September 2024, 4(a) (New Scheme).

(a)In terms of section 128(3) of the Companies Act, 2013 the books of account and other books and papers maintained by the company within India shall be open for inspection at the registered office of the company or at such other place in India by any director during business hours and in the case of financial information, if any, maintained outside the country, copies of such financial information shall be maintained and produced for inspection by any director subject to such conditions as prescribed in Rule 4 of the Companies (Accounts) Rules, 2014.

The financial information shall be sought for by the director himself and not by or through his power of attorney holder or agent or representative.

As per the facts of the question, the books of accounts and other records including minutes books are maintained at the registered office of Designer’s Cloths Ltd. in Mumbai i.e. within India. Sanjana as the director of the company can inspect the books of accounts and minutes books. But she cannot authorize Avantika to make an inspection on behalf of her.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, September 2024, 5(a) (New Scheme).

(b)1. Provisions of section 128 of the Companies Act, 2013, requires every company to prepare and keep the books of account and other relevant books and papers and financial statements at its registered office.

It also provides that all or any of the books of account may be kept at such other place in India as the Board of directors may decide. Where such a decision is taken by the Board, the company shall within seven days thereof file with the registrar a notice in writing as per rule 2A of the Companies (Accounts) Rules, 2014 in form AOC-5 giving full address of that other place.

Thus, in the given case, the books of accounts of BBQ Ltd. should be prepared and maintained at registered office in Hyderabad. However, the same can be maintained at the respective branches if the Board of directors have decided so and intimated the registrar a notice in writing within 7 days thereof giving full address of that other place (i.e. other than the registered office).

Hence, objection of Mr. Naveen is valid as intimation to registrar is not specified in the question.

2.Where a company has a branch office in or outside India, it shall be deemed to have complied with the requisite provisions of section 128(1) if-

a.Proper books of account relating to the transactions effected at the branch office are kept at that office, and

b.Proper summarised returns are sent on periodical basis by branch office to the company at its registered office or other place.

As per Rule 4(1) of the Companies (Accounts) Rules, 2014, the summarized returns of the books of account of the company kept and maintained outside India shall be sent to the registered office at quarterly intervals, which shall be kept and maintained at the registered office of the company and kept open to directors for inspection.

Since, London office was sending summarized returns to the registered office in Hyderabad on quarterly basis, which is as per the requirement of law, hence, the objection of Mr. Naveen is invalid.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2024, 1(b) (New Scheme).

(a)(i) According to section 130 of the Companies Act, 2013, a company shall not:

a.re-open its books of account and

b.recast its financial statements,

unless an application in this regard is made by:

a.the Central Government,

b.the Income-tax authorities,

c.the Securities and Exchange Board of India (SEBI),

d.any other statutory regulatory body or authority or

e.any person concerned.

& an order is made by a court of competent jurisdiction or tribunal to the effect

a.That the relevant earlier accounts were prepared in a fraudulent manner; or

b.The affairs of the company were mismanaged during the relevant period, casting a doubt on the reliability of financial statements.

No order shall be made in respect of re-opening of books of account relating to a period earlier than 8 financial years immediately preceding the current financial year. However, where a direction has been issued by the Central Government under the proviso to section 128(5) for keeping of books of account for a period longer than 8 years, the books of account may be ordered to be re-opened within such longer period.

(ii)According to section 131 of the Companies Act, 2013, if it appears to the directors of a company that:

a.the financial statement of the company does not comply with the provisions of section 129; or

b.the report of the Board does not comply with the provisions of section 134.

They may prepare revised financial statemen t or board’s report in respect of any of the three preceding financial years.

Such revised financial statement or report shall not be prepared or filed more than once in a financial year.

(iii)The board of directors may revise financial statements in respect of any of the three preceding financial years.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2024, 6(a) OR (New Scheme).

(c)(i) As per Rule 2(1)(e) Companies (Acceptance of Deposits) Rules, 2014, the term ‘ eligible company ’ means a public company as referred to in section 76(1) of the Companies Act, 2013, which is ‘eligible’ to accep t deposits from the public at large only if it meets the below-mentioned criteria. Accordingly,

•It should be a public company.

•It should have net worth of minimum ₹ 100 crore or a turnover of minimum ₹ 500 crore.

•It has obtained the prior consent by means of a special resolution passed in general meeting.

•The special resolution has been filed with the Registrar of Companies.

•An ordinary resolution is sufficient if an eligible company is accepting deposits within the limits specified under section 180 (1) (c).

In the instant case, the net worth of WEE Remedies Limited is ₹ 120 crore, hence it is eligible to accept deposits from the public.

Tenure for which Deposits can be Accepted: A company is not permitted to accept or renew deposits (whether secured or unsecured) which is repayable on demand or in less than six months. Further, the maximum period of acceptance of deposit cannot exceed thirty-six months.

The tenure for the proposed deposits dated 1st November 2022 which would be due for repayment on 30th September, 2027, is not valid, as the maximum period of acceptance of deposit cannot exceed 36 months. Hence, it is not in compliance with the provisions of the Companies Act, 2013.

(ii)In terms of Rule 2(1)(c)(viii), any amount received from a person who is director of the company at the time of giving loan to the company shall not be treated as deposit if such director furnishes to the company at the time of giving money, a written declaration to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and further, the company shall disclose the details of money so accepted in the Board's report.

In the given case, the said deposits by Mr. Seth shall not be treated as deposit.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, November 2023, 4(c) (Old Scheme).

(b)According to first provision to Section 137(1) of the Companies Act, 2013, where the financial statements are not adopted at Annual General Meeting (AGM) or adjourned AGM, such unadopted financial statements along with the required documents shall be filed 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.

According to second proviso to section 137(1) of the Companies Act, 2013, financial statements adopted in the adjourned AGM shall be filed with the Registrar within thirty days of the date of such adjourned AGM with such fees or such additional fees as may be prescribed.

In the instant case, the accounts of Moon Ltd. were adopted at the adjourned AGM held on 5th October, 2022 and filing of financial statements with Registrar was done on 25th October, 2022 i.e. within 30 days of the date of adjourned AGM. However, Moon Ltd. has not filed its unadopted financial statements within 30 days of the date of the Annual General Meeting held on 31st August 2022.

Hence, Moon Ltd. has not complied with the statutory requirement regarding filing of unadopted accounts with the Registrar, but has certainly complied with the provisions by filing of adopted accounts within the due date with the Registrar.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, November 2022, 3(b) (Old Scheme).

(a)(i) According to section 129(3) of the Companies Act, 2013, where a company has one or more subsidiaries or associate companies, it shall, in addition to financial statements provided under sub-section (2), prepare a consolidated financial statement (CFS) of the company and of all the subsidiaries and associate companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which shall also be laid before the annual general meeting of the company along with the laying of its financial statement under subsection (2).

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 and associate company or companies in Form AOC-1 as per Rule 5 of the Companies (Accounts) Rules, 2014.

Provided further that the Central Government may provide for the consolidation of accounts of companies in such manner as may be prescribed under Rule 6 of the Companies (Accounts) Rules, 2014.

Since, consolidation of accounts is to be done by the holding company (i.e. Diya Limited), Jai Limited and Vijay Limited shall prepare their Balance Sheet and Statement of Profit and Loss Account normally following the relevant provisions of the Companies Act, 2013 compliant with the applicable Accounting Standards.

(ii)Directors’ Responsibility Statement: According to section 134(5) of the Companies Act, 2013, the Directors’ Responsibility Statement referred to in 134(3)(c) shall state that -

(1)in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(2)the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(3)the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(4)the directors had prepared the annual accounts on a going concern basis; and

(5)the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

Here, the term “internal finan cial contr ols” means the policies and proc edures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s polic ies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

(6)the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, December 2021, 4(a) (Old Scheme).

(a)Rule 8(3) of the Companies (Corporate Social Responsibilities Policy), 2014 provides the class of companies that are required conduct an impact assessment.

Every company having average CSR obligation of ten crore rupees or more in pursuance of section 135(5) of the Companies Act, 2013, in the three immediately preceding financial years, shall undertake impact assessment, through an independent agency, of their CSR projects having outlays of one crore rupees or more, and which have been completed not less than one year before undertaking the impact study.

The above-mentioned companies may undertake impact assessment, through an independent agency.

Alternate Answer

(i)Meaning of Impact Assessment:

The impact assessment is an exercise to assess the social, economic and environmental impact of a particular CSR project. Impact assessment intends to evaluate “social, economic and environmental return on investment”. It is the exercise of taking a retroactive view of the Corporate Social Responsibility (CSR) activities completed by the entity and assess the effects of these activities on various stakeholders like employees, customers, communities and the environment.

Impact assessment is seemingly another step to encourage companies to make considered decisions before deploying CSR amounts and assess the impacts of their investments to capture the impact being generated by them. This shall not only serve as feedback for companies to plan and better allocate resources, but shall also deepen the impact of CSR.

(ii)Whether the impact assessment is to be taken by all Companies?

Since impact assessment is cost-intensive and time consuming, the idea is to obligate only certain classes of companies which have large amount of spending and have completed their large CSR projects. Accordingly, Rule 8(3) of the Companies (Corporate Social Responsibilities Policy), 2014 requires the following class of companies to conduct an impact assessment:

Every company having average CSR obligation of ₹ 10 crore or more

in the three immediately preceding financial years of their CSR projects having outlays of 1 crore rupees or more, and which have been completed not less than 1 year before undertaking impact assessment.

(iii)Who can conduct an impact assessment?

The impact assessment shall be conducted by an independent agency.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, January 2025, 5(a) (New Scheme).

(b)(i) According to section 135 of the Companies Act, 2013, every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director:

“Net worth” [As per section 2(57)] means the aggregate value of the paid-up share capital and all reserves created out of the profits, securities premium account and debit or credit balance of the profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation.

As the Net worth of the company is more than ₹ 510 crore (i.e more than ₹ 500 crore ) , hence the company has attracted the provisions of section 135 of the Companies Act, 2013.

(ii)The CSR Committee is constituted of CA. R. C. Goel (Managing Director), Varun (director), Prabodh (director) and Vineet (Chief Compliance Officer). The composition of the committee is not in compliance with section 135 of the Companies Act, 2013, as no independent director is the part of the committee. Further, Chief Compliance Officer has also been included which is not the requirement of the Act.

(iii)

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, November 2023, 1(b) (Old Scheme).

(a)(i) Correctness of the contention and required calculations: According to section

135(1) of the Companies Act, 2013, every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee (CSR) of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

Net worth meaning and calculation: As per the requir ement, “ Net worth” in the light of the provided particulars calculated as ₹ 520 crore [aggregate value of the paid-up share capital ( ₹ 200 crore), all reserves created out of the profits ( ₹ 200 crore), securities premium account ( ₹ 80 crore) and debit or credit balance of the profit and loss account ( ₹ 50 crore), after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off ( ₹ 10 crore), as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation], Turn over given as ₹ 800 crore and Net profits ₹ 4 crore. Since the net worth is not less than ₹ 500 crore section 135(1) is attracted.

Yes, the contention of Praveen, the Company Secretary is correct w.r.t the constitution of CSR Committee as per the compliance of requirement of section 135 of the Companies Act, 2013.

(ii)Correctness of constitution of CSR Committee: As per requirement, Corporate

Social Responsibility Committee of the Board shall be consisting of three or more directors, out of which at least one director shall be an independent director. Decision that Mohan Singh, Venkatesh, Isha and Bhavna (Independent Director) will be the members of CSR Committee, is correct.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2023, 3(a) (Old Scheme).

(b)(i) According to section 135(1) of the Companies Act, 2013, every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board.

Further, according to section 135(5), the Board of every company referred to in subsection (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.

Here, the “Net Profit” shall not include such sums as may be prescribed, and shall be calculated in accordance with the provisions of section 198.

In the instant case,

1.Net Profit before tax of SKIP Limited for the FY 2020-21 is ₹ 7 crore, hence, SKIP Limited is required to constitute a CSR committee during FY 2021-22 as the Net profit before tax for the FY exceeds ₹ 5 crore.

2.Minimum contribution towards CSR will be: 2% of average net profits since incorporation (SKIP Limited was incorporated on 1.04.2019.)

Average Net Profit since incorporation: ( ₹ 5 crore + ₹ 7 crore)/ 2 = ₹ 6 crore

Minimum contribution towards CSR will be: 2% of ₹ 6 crore = ₹ 0.12 crore or ₹ 12 Lacs

(ii)According to section 55(3) of the Companies Act, 2013, where a company is not in a position to redeem any preference shares or to pay dividend, if any, on such shares in accordance with the terms of issue (such shares hereinafter referred to as unredeemed preference shares), it may -

➢ with the consent of the holders of three-fourths in value of such preference shares, and

➢ with the approval of the Tribunal on a petition made by it in this behalf, issue further redeemable preference shares equal to the amount due, including the dividend thereon, in respect of the unredeemed preference shares, and on the issue of such further redeemable preference shares, the unredeemed preference shares shall be deemed to have been redeemed.

Provided that the Tribunal shall, while giving approval under this sub-section, order the redemption forthwith of preference shares held by such persons who have not consented to the issue of further redeemable preference shares.

In the instant case, since the company made a petition to the NCLT with the consent of Redeemable Preference Shareholders of 70% in value, the said petition is not valid and will not be approved by the NCLT.

If the consent has been taken by three-fourths (75%) in value of such preference shares, the company can include the dividend unpaid in the above issue of redeemable preference shares.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2022, 1(b) (Old Scheme).

(b)Periodical Financial Results [Section 129A of the Companies Act, 2013]

The Central Government may, require such class or classes of unlisted companies, as may be prescribed, -

(a)to prepare the financial results of the company on periodical basis and in prescribed form

(b)to obtain approval of the Board of Directors and complete audit or limited review of such periodical financial results in the prescribed manner; and

(c)file a copy with the Registrar within a period of thirty days of completion of the relevant period with such fees as may be prescribed.

Therefore, the objection of the Board of Directors on the ground that as XYZ Ltd. is an unlisted company, periodical financial results need not be prepared, is not correct. Section 129A clearly specifies that even unlisted company has to prepare Periodical Financial Results.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, May 2022, 2(b) (Old Scheme).

(a)According to section 134(1) of the Companies Act, 2013, the financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director, if any, and the Chief Executive Officer, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of One Person Company, only by one director, for submission to the auditor for his report thereon.

In the question given, the profit and loss account and the balance sheet of the company were signed by Mr. N (director), Mr. P (director) and Mr. A (Chairperson). The signing of the Financial Statements is not in order as it should be signed at least by Mr. R (the Managing director), either Mr. N (Director) or Mr. P (Director), Mr. D (Chief Financial Officer) and Mr. C (Company Secretary) also. Further, Mr. A is not authorized by the Board, so he will not sign the financial statements.

In case the company is a One Person Company, the authentication by one director itself will be valid.

Source⁠​‌​‌‌​‌​⁠: ICAI Suggested Answers, January 2026, 4(a) (New Scheme).