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CA Intermediate · Corporate and Other Laws · Accounts of Companies

Mahalakshmi Steels Ltd is a company with a net worth of Rs 600 crore. Its Board is considering the preparation and approval of the financial statements for the year ended 31 March. Which statement is correct regarding who must sign the financial statements on behalf of the Board?

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 appointed. Shareholders or the secretary alone cannot sign, and the auditor signs only the report.

  1. AOnly the company secretary may sign them
  2. BOnly the statutory auditor signs, and the Board has no role
  3. CAny two shareholders present at the AGM
  4. DThe chairperson authorised by the Board, or two directors of whom one is the managing director (if any), together with the CEO, CFO and company secretary where they are appointed, sign the financial statementsCorrect

Explanation

The Act requires the financial statements to be signed on behalf of the Board by the chairperson if authorised, or by two directors one of whom is the managing director, if any, and by the CEO, CFO and company secretary, wherever they are appointed (for a company with only one person or no such officers, the directors). Option A and B ignore the Board's responsibility. Option C has no basis in law.

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