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CA Intermediate · Corporate and Other Laws · Accounts of Companies

Meridian Textiles Ltd, a public company, closed its financial year on 31 March. Its board wants to approve the financial statements at a meeting. Under the Companies Act, 2013, who must sign the financial statements on behalf of the board before they are approved and adopted for the purpose of being laid before the AGM?

The financial statements are signed on behalf of the board by the authorised chairperson or by two directors, one of them the managing director if any, together with the CEO, CFO and company secretary where appointed. Shareholders and the auditor do not sign as approving authority.

  1. AChairperson authorised by the board, or two directors one of whom is the managing director, along with the CEO, CFO and company secretary where they are appointedCorrect
  2. BOnly the company secretary, since he is responsible for compliance filings
  3. CAny two shareholders present at the AGM
  4. DOnly the statutory auditor, since he reports on the statements

Explanation

Financial statements must be signed on behalf of the board by the chairperson (if authorised) or by two directors, one being the managing director if there is one, and also by the CEO, CFO and company secretary where appointed. Shareholders do not sign them. The auditor signs his own report, not the statements as management's approval. The company secretary alone is insufficient.

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