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CA Intermediate · Corporate and Other Laws · Accounts of Companies

Kaveri Textiles Ltd, a public company, closed its books on 31 March. Its Board approved the financial statements and the Board's report. The company secretary asks who must sign the financial statements on behalf of the Board before they are adopted by the Board. Under the Companies Act, 2013, which position is correct?

The financial statements are signed on behalf of the Board by the authorised chairperson or by two directors (one being the managing director, if any), along with the CEO, CFO and company secretary wherever they are appointed. The auditor only reports; members and the secretary alone cannot sign.

  1. AChairperson authorised by the Board, or two directors (one of whom is the managing director, if any), together with the CEO, CFO and company secretary where they are appointedCorrect
  2. BOnly the statutory auditor, since the financial statements are an audit document
  3. CAny two members of the company holding at least 10% of the shares
  4. DOnly the company secretary, as the officer in charge of compliance

Explanation

The financial statements must be signed by the chairperson (if authorised by the Board) or by two directors, one of whom is the managing director if there is one, along with the CEO, CFO and company secretary where they are appointed. The auditor reports on the statements but does not sign on behalf of the Board. Members and the company secretary alone cannot sign in place of directors.

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