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IAI Actuarial Core Principles · Business Finance · Regulation of financial reporting of incorporated entities

A listed Indian company's financial year ends on 31 March. Under the Companies Act 2013, which statement about the financial year and the preparation of accounts is correct?

A company's financial year must end on 31 March. The only exception is for a company that is a holding, subsidiary or associate of a foreign body corporate requiring a different year for consolidation, which needs permission from the Tribunal. Auditors, the Registrar or the company alone cannot choose another year-end.

  1. AThe company may choose any 12-month period regardless of 31 March, provided its auditor agrees
  2. BThe financial year must end on 31 March, unless the company is a subsidiary or associate of a foreign company needing a different year and obtains Tribunal permissionCorrect
  3. CThe financial year must end on 31 December for listed companies
  4. DCompanies may use a financial year of up to 18 months without any approval
  5. The financial year is decided each year by the Registrar of Companies

Explanation

The Act fixes the financial year as ending on 31 March. A company that is a holding or subsidiary or associate of a body corporate outside India that needs a different year for consolidation may apply to the Tribunal for a different year. The auditor has no power to approve a different year, and no general 18-month freedom exists.

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