Reporting Requirements
1. Annual Accounts:
- Under Indian Company Law, there is a flexibility in maintaining books of accounts. While specific books are not prescribed, it mandates maintaining accounts on an accrual basis and following the double-entry system. The accounts should provide a true and fair view of the company’s financial status.
- The law requires companies to maintain proper books of account, covering details such as money transactions, sales and purchases, and assets and liabilities. For companies involved in manufacturing, processing, or mining, additional particulars related to material or labor utilization are necessary.
- Annual accounts must be drawn up from the date of incorporation up to the Annual General Meeting (AGM) date, not exceeding 15 months. An extension of the accounting period up to 18 months is possible with the Registrar of Companies’ permission. These accounts must be filed with the ROC within 30 days from the AGM date.
2. Books of Accounts:
- Companies are obligated to maintain proper books of accounts, covering various financial aspects. Certain classes of companies may be required to preserve additional particulars, as specified by the Central Government. Financial statements must comply with accounting standards issued by the Institute of Chartered Accountants of India, with any deviations requiring disclosure.
- Management is responsible for preparing financial statements on a going concern basis, selecting appropriate accounting policies, and making reasonable and prudent judgments and estimates. Any material departure from accounting standards must be explained in the financial statements.
3. Annual Return:
Every company with share capital must file an annual return with the ROC within 60 days from the AGM date or, if no AGM is held, within 60 days of the last date when the AGM should have taken place.
Contact Us