Financial Statement Preparation

Financial statement preparation produces the formal period-end or year-end accounts of a business. A complete set under the Companies Act 2013 comprises the balance sheet, the statement of profit and loss, the cash flow statement where applicable, the statement of changes in equity, and the notes to accounts. Supporting schedules for fixed assets, investments, borrowings and similar items accompany these. The statements are drawn from the books of account and presented in the format the law prescribes.

Bookkeeping and accounting are continuous activities that record daily transactions through the year. Financial statement preparation is the period-end exercise that turns those records into structured statements for a defined purpose, such as a year-end close, a quarterly or half-yearly report, or a submission to a bank or regulator. It is carried out on a chosen date or on demand, applying the relevant accounting standards, disclosure rules and presentation format, which day-to-day bookkeeping does not address.

Every company registered under the Companies Act 2013, whether private, public or a one person company, must prepare financial statements for each financial year. Limited liability partnerships prepare a statement of accounts and solvency, and other businesses prepare financial statements when income tax law, a lender, a tender, or a regulator requires them. We confirm the applicable requirement for your entity type before preparing the statements.

For a company, the financial statements must be audited under the Companies Act 2013 regardless of size, and that statutory audit is separate from a tax audit. A tax audit applies only where turnover or receipts cross the thresholds set under the income tax law. The tax-audit provision is Section 44AB [ITA 2025: s. 63], and the report is furnished under Rule 6G [ITR 2026: r. 47] in Form 3CA [ITR 2026: Form 26, Part A] or Form 3CB [ITR 2026: Form 26, Part B] with Form 3CD [ITR 2026: Form 26, Parts C and D]. The applicable provisions and form depend on the relevant period and the repeal-and-savings rules. We prepare statements that support both the statutory audit and, where it applies, the tax audit.

Two frameworks operate in India. Indian Accounting Standards (Ind AS) apply to all listed companies, to unlisted companies with a net worth of Rs 250 crore or more, and to the holding, subsidiary, associate and joint venture companies of any company that applies Ind AS. Companies below these limits generally follow the older Accounting Standards (AS). Net worth is measured from audited standalone accounts, and once Ind AS applies it continues to apply in later years. We confirm the correct framework for your company before drafting.

Schedule III to the Companies Act 2013, read with Section 129, prescribes the format and minimum disclosures for a company's balance sheet and statement of profit and loss. It has separate divisions: Division I for companies on Accounting Standards, Division II for companies on Ind AS, and Division III for non-banking financial companies. Using the correct division keeps the statements acceptable for audit, ROC filing and lender review. We prepare each statement in the division that fits your company.

No. A one person company, a small company and a dormant company are not required to include a cash flow statement, under the proviso to Section 2(40) of the Companies Act 2013. A small company is currently a private company with paid-up capital up to Rs 10 crore and turnover up to Rs 100 crore, following the revision notified in December 2025. Companies outside these categories prepare a cash flow statement, usually under the indirect method, as part of the full set.

The notes to accounts are the explanatory disclosures attached to the primary statements. They set out the accounting policies applied, significant estimates and judgments, contingent liabilities, related party transactions, and segment and other information required by the standards and Schedule III. The notes let a reader understand how the figures were arrived at, and incomplete notes are a common reason for audit queries and lender follow-ups. We draft the notes to match the disclosures your framework requires.

Under Section 134 of the Companies Act 2013, the financial statements are approved by the board and signed on its behalf, generally by the chairperson where authorised or by two directors including the managing director, together with the chief executive officer, chief financial officer and company secretary where the company has them. The signed statements are then placed before the members and filed with the Registrar. We prepare the statements in a form ready for board approval and signature.

Provisional financial statements are interim accounts prepared before the final audited statements are ready, using actual figures available up to a chosen date and reasonable estimates for the remaining period. Businesses need them when a bank, an investor or a tender requires current financial information before the year-end audit is complete, or part way through a year. They are clearly marked as provisional and are replaced by the audited statements once those are finalised.

The three differ by time horizon. Provisional statements cover a period that has largely passed, combining actual figures with estimates for the unfinished part, and remain pending audit. Estimated statements present a full-year figure for the current year based on performance so far. Projected statements look forward to future years, modelling expected revenue, costs and cash flows. Lenders often ask for provisional statements for the current position and projected statements for the loan period. We prepare each on the basis the lender or user specifies.

A chartered accountant can prepare and certify provisional and projected financial statements, and banks commonly accept CA-certified statements as part of a loan or credit facility application. The certificate states the basis of preparation and the assumptions used, and separates actual figures from estimates. This certification confirms how the statements were compiled and is not an audit opinion on completed accounts. We prepare and certify these statements with the supporting basis a lender expects.

Form AOC-4 is the form through which a company files its financial statements with the Registrar of Companies, under Section 137 of the Companies Act 2013. It must be filed within 30 days of the annual general meeting at which the statements are adopted. A one person company files within 180 days of the close of the financial year. Companies above certain size or listing criteria file in the AOC-4 XBRL format. We prepare the statements and the form so the filing is accepted on the portal.

The AOC-4 filing carries the audited balance sheet, statement of profit and loss, cash flow statement where applicable, the board report, and the auditor's report. A company with subsidiaries, associates or joint ventures also files Form AOC-1 with details of those entities, and consolidated financial statements where required. Supporting approvals and any explanation for an unadopted statement are attached as needed. We assemble the complete set so nothing is missing at the time of filing.

Late filing of Form AOC-4 attracts an additional fee of Rs 100 for each day of delay, with no upper limit. Continued default carries further penalties under Section 137(3) of the Companies Act 2013 on the company and its officers, and prolonged non-filing can lead to director disqualification and strike-off action. Errors may require a revised filing under the revision provisions of the Act. Accurate preparation and timely filing avoid these outcomes, which is the basis on which we work.