Companies Act 2013 Chapter 9 Notes, Download Free PDF

Published on 31 October 2025 by

The Chapter IX of the Companies Act, 2013 focuses on the Accounts of Companies, covering Sections 128 to 138. This chapter ensures that every company maintains proper financial records, prepares and presents accurate financial statements, follows standard accounting practices, and remains accountable to shareholders, regulators, and the public.

The chapter also introduces concepts like Corporate Social Responsibility (CSR), Internal Audit, and the National Financial Reporting Authority (NFRA) ensuring transparency and good governance in the corporate world.

In this blog, we have provided detailed notes on each section covered under Chapter 9 of the Companies Act, 2013, along with a link to download the Companies Act, 2013 PDF.

Topics Covered Under Chapter 9 of Companies Act 2013

The chapter ensures transparency, accountability, and accuracy in a company’s financial reporting. It prescribes how books of accounts are to be maintained, who can inspect them, and how financial results are to be published and audited.

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  • Section 128: Books of account to be kept by the company
  • Section 129: Financial statement
  • Section 129A: Periodical financial results
  • Section 130: Re-opening of accounts on court’s or Tribunal’s order
  • Section 131: Voluntary revision of financial statements or Board’s report
  • Section 132: Constitution of National Financial Reporting Authority (NFRA)
  • Section 133: Central Government to prescribe accounting standards
  • Section 134: Financial statement, Board’s report, etc.
  • Section 135: Corporate Social Responsibility (CSR)
  • Section 136: Right of members to copies of audited financial statement
  • Section 137: Copy of financial statement to be filed with Registrar
  • Section 138: Internal Audit

Section 128 Books of Account, etc., to be Kept by Company

Every company must keep proper books of account at its registered office that show the true and fair view of its financial affairs.

  • The records should include details of all receipts, payments, sales, purchases, assets, and liabilities.
  • Books can also be maintained in electronic form.
  • Directors have the right to inspect the books during business hours.
  • If the company has branch offices, proper summaries of transactions must be sent to the registered office.
  • Books of account must be preserved for at least 8 financial years.
  • Non-compliance can lead to penalties for the company and its officers.
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Section 129 Financial Statement

A financial statement includes:

  • Balance Sheet
  • Profit & Loss Account (or Income & Expenditure Account for Not-for-Profit entities)
  • Cash Flow Statement
  • Statement of Changes in Equity (if applicable)
  • Notes to Accounts

Key points:

  • It must present a true and fair view of the company’s affairs.
  • It should comply with the accounting standards specified under Section 133.
  • Financial statements must be approved by the Board before being signed and presented in the general meeting.
  • For consolidated financial statements, holding companies must also include the financials of their subsidiaries, joint ventures, and associates.

Section 129A Periodical Financial Results

This section was added by the Companies (Amendment) Act, 2020.

  • Certain prescribed companies must prepare and file periodical financial results with the Central Government.
  • These results help in maintaining regular financial transparency and monitoring performance between annual reports.
  • The format, time period, and manner are to be prescribed by the Central Government through rules.
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Section 130 Re-opening of Accounts on Court’s or Tribunal’s Orders

A company’s accounts can be reopened or revised only through an order of a Court or Tribunal. Conditions for reopening:

  • Discovery of fraud or mismanagement.
  • Misrepresentation of financial position.
  • Material mistakes in previously approved financial statements.

Who can apply:

  • Central Government
  • Income Tax Authorities
  • SEBI or any other statutory authority
  • Any concerned person

Once reopened, the revised accounts must be re-audited and approved by the Board.

Section 131 Voluntary Revision of Financial Statements or Board’s Report

If a company finds an error or omission in its previously approved financial statement or Board’s Report, it can voluntarily apply to the Tribunal for permission to revise them.
Key points:

  • The revision can only be made for the three preceding financial years.
  • Reasons for such revision must be disclosed in the Board’s report.
  • Revised copies must be filed with the Registrar.
  • This section promotes accuracy and transparency in financial reporting.

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Section 132 Constitution of National Financial Reporting Authority (NFRA)

The National Financial Reporting Authority (NFRA) is an independent regulatory body set up by the Central Government. Functions of NFRA:

  • Recommend accounting and auditing standards.
  • Monitor and enforce compliance with such standards.
  • Investigate professional misconduct by auditors.
  • Impose penalties and debar auditors or audit firms for violations.

NFRA ensures integrity and quality in financial reporting and auditing practices in India.

Section 133 Central Government to Prescribe Accounting Standards

Under this section:

  • The Central Government, after consulting NFRA, may prescribe accounting standards.
  • These standards ensure uniformity and comparability in financial statements.
  • All companies are required to comply with the prescribed accounting standards while preparing their financial statements.

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Section 134 Financial Statement, Board’s Report, etc.

This section lays down the procedure for approval and presentation of the company’s financial statements and Board’s Report. Key provisions:

  • The Board of Directors must approve the financial statement before it is signed.
  • It must be signed by the Chairperson or two directors, one being the Managing Director.
  • The Board’s Report must include:
    • Financial summary and performance highlights
    • Details of CSR activities
    • Directors’ Responsibility Statement
    • Details of related party transactions
    • Auditor’s qualifications or remarks (if any)
  • Copies must be circulated to members and filed with the Registrar.
  • Non-compliance may attract fines and penalties.

Section 135 Corporate Social Responsibility (CSR)

One of the most significant provisions of the Act. A company must comply with CSR provisions if it meets any of the following:

  • Net worth of ₹500 crore or more,
  • Turnover of ₹1,000 crore or more, or
  • Net profit of ₹5 crore or more during the previous financial year.

Key provisions:

  • The company must form a CSR Committee of the Board.
  • It must spend at least 2% of its average net profits (of the last 3 years) on CSR activities.
  • Unspent CSR amounts must be transferred to specific funds as per the CSR Rules.
  • CSR details must be disclosed in the Board’s Report and website.
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Section 136 Right of Member to Copies of Audited Financial Statement

Before a company holds its Annual General Meeting (AGM), it is essential that all members, shareholders, and key stakeholders are informed about the company’s financial performance.

Section 136 ensures transparency and accessibility by granting every member the right to receive a copy of the audited financial statements. This provision strengthens shareholders’ participation in company decisions by enabling them to review the company’s financial health before the AGM.

  • Every company must send a copy of the audited financial statements to:
    • Every member,
    • Trustee for debenture holders, and
    • All other entitled persons.
  • This must be done at least 21 days before the Annual General Meeting (AGM).
  • Listed companies must also upload these documents on their official website.
  • This provision ensures that shareholders are well-informed about the company’s financial position before the AGM.

Section 137 Copy of Financial Statement to be Filed with Registrar

After the approval of financial statements in the AGM, the next step is ensuring that these records are available for public and regulatory access. Section 137 mandates that every company must file a copy of its financial statement and related documents with the Registrar of Companies (ROC) within a specified time frame.

This filing maintains corporate transparency, helps regulatory bodies track compliance, and provides investors with accurate information about a company’s financial position.

  • Every company must file a copy of its financial statement (with all relevant documents) with the Registrar of Companies (ROC) within 30 days of the AGM.
  • In case the AGM is not held, the statement must still be filed with necessary explanations.
  • Delayed filing attracts financial penalties for the company and its officers.

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Section 138 Internal Audit

Internal audit serves as an essential internal control mechanism to evaluate a company’s operations and ensure compliance with policies and laws. Section 138 introduces the concept of internal audit for specific classes of companies, requiring them to appoint qualified professionals to periodically assess and improve their internal systems.

This ensures efficiency, accountability, and risk management within the organization, helping management make informed decisions based on verified internal data.

  • Certain classes of companies are required to conduct an internal audit to ensure efficient management and internal control.
  • The internal auditor may be:
    • A Chartered Accountant,
    • A Cost Accountant, or
    • Any other professional as decided by the Board.
  • The purpose is to evaluate and improve risk management, operational control, and compliance systems.
  • The Central Government specifies which companies are required to have internal audits (based on turnover, paid-up capital, or borrowings).

Download Companies Act 2013 Chapter 9 Free PDF

Aspirants preparing for the UGC NET Commerce paper, SEBI Grade A exam, and various other government exams can download the complete details of the Companies Act, 2013 through the direct link provided below. Specifically, to check Chapter 4 of the Companies Act, 2013, refer to pages 85 to 96 of the PDF.

Download Companies Act 2013 Free PDF

Questions Based on Chapter 9 of Companies Act 2013

1. Under which section of the Companies Act, 2013 is the maintenance of books of account specified?

A) Section 127
B) Section 128
C) Section 129
D) Section 130
E) Section 138

Correct Answer: B) Section 128

Explanation: Section 128 mandates every company to maintain proper books of account at its registered office to reflect the true and fair state of affairs of the company.

2. For how many years must a company preserve its books of account?

A) 5 years
B) 6 years
C) 8 years
D) 10 years
E) 7 years

Correct Answer: C) 8 years

Explanation: As per Section 128(5), companies must preserve books of account for at least eight financial years immediately preceding the current financial year.

3. What does a “financial statement” include under Section 129?

A) Only Profit & Loss Account
B) Only Balance Sheet
C) Balance Sheet, Profit & Loss Account, Cash Flow Statement, and Notes
D) Only Auditor’s Report
E) Only Notes to Accounts

Correct Answer: C) Balance Sheet, Profit & Loss Account, Cash Flow Statement, and Notes

Explanation: A financial statement as defined under Section 129 includes Balance Sheet, Profit & Loss Account, Cash Flow Statement, and Notes to Accounts (and for some entities, a Statement of Changes in Equity).

4. The financial statement must present a ________ view of the company’s affairs.

A) Complete
B) True and fair
C) Standardized
D) Estimated
E) Statutory

Correct Answer: B) True and fair

Explanation: As per Section 129(1), the financial statement must present a true and fair view of the state of affairs of the company’s business.

5. Which section deals with the preparation and filing of periodical financial results?

A) Section 128
B) Section 129A
C) Section 132
D) Section 134
E) Section 137

Correct Answer: B) Section 129A

Explanation: Section 129A, inserted by the Companies (Amendment) Act, 2020, empowers the Central Government to require certain companies to prepare and file periodical financial results.

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6. Under which circumstances can a company reopen its accounts?

A) On approval from shareholders
B) On order of the Court or Tribunal
C) By internal audit committee
D) On recommendation of auditors
E) On Board’s decision

Correct Answer: B) On order of the Court or Tribunal

Explanation: As per Section 130, accounts can be reopened only by order of a Court or Tribunal, if fraud, mismanagement, or misrepresentation is proven.

7. Who can apply for reopening of company accounts under Section 130?

A) Company itself
B) SEBI, Income Tax Department, or Central Government
C) Shareholders only
D) Board of Directors only
E) Statutory Auditor

Correct Answer: B) SEBI, Income Tax Department, or Central Government

Explanation: Section 130 allows applications by Central Government, Income Tax Authorities, SEBI, or any statutory authority to reopen accounts in case of fraud or misrepresentation.

8. Under Section 131, how many previous financial years can be voluntarily revised?

A) 1 year
B) 2 years
C) 3 years
D) 5 years
E) 4 years

Correct Answer: C) 3 years

Explanation: A company can revise its financial statements or Board’s Report for up to three preceding financial years with Tribunal approval (Section 131).

9. What is NFRA as per Section 132?

A) National Financial Reporting Authority
B) National Financial Regulation Agency
C) National Finance Reporting Association
D) National Forensic Reporting Authority
E) National Fiscal Regulation Authority

Correct Answer: A) National Financial Reporting Authority

Explanation: Section 132 establishes the National Financial Reporting Authority (NFRA) to oversee accounting and auditing standards and handle auditor misconduct cases.

10. Who prescribes accounting standards under Section 133?

A) RBI
B) ICAI
C) Central Government after consulting NFRA
D) Parliament
E) Registrar of Companies

Correct Answer: C) Central Government after consulting NFRA

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Explanation: Section 133 states that accounting standards are prescribed by the Central Government in consultation with the NFRA.

11. The Board’s Report is required under which section?

A) Section 128
B) Section 130
C) Section 134
D) Section 135
E) Section 137

Correct Answer: C) Section 134

Explanation: Section 134 specifies that the Board’s Report must be approved by the Board and presented along with the financial statement in the AGM.

12. Which of the following is NOT required to be included in the Board’s Report?

A) Directors’ Responsibility Statement
B) Auditor’s Report
C) CSR details
D) Related Party Transactions
E) Financial summary

Correct Answer: B) Auditor’s Report

Explanation: While the Board’s Report includes CSR, related party transactions, and financial summaries, the Auditor’s Report is a separate document presented with financial statements.

13. Section 135 deals with which important corporate provision?

A) Internal Audit
B) Corporate Social Responsibility (CSR)
C) Audit Committee
D) Auditor Appointment
E) Accounting Standards

Correct Answer: B) Corporate Social Responsibility (CSR)

Explanation: Section 135 introduces CSR, making it mandatory for eligible companies to spend 2% of their average net profits on social welfare activities.

14. A company is required to comply with CSR if its net worth is at least:

A) ₹250 crore
B) ₹400 crore
C) ₹500 crore
D) ₹600 crore
E) ₹1000 crore

Correct Answer: C) ₹500 crore

Explanation: Section 135 applies to companies having net worth ≥ ₹500 crore, or turnover ≥ ₹1000 crore, or net profit ≥ ₹5 crore.

15. CSR spending should be at least what percentage of average net profits of the last 3 years?

A) 1%
B) 1.5%
C) 2%
D) 2.5%
E) 3%

Correct Answer: C) 2%

Explanation: As per Section 135(5), every eligible company must spend at least 2% of its average net profits of the previous three years on CSR activities.

16. Under Section 136, a copy of the audited financial statement must be sent to members how many days before the AGM?

A) 7 days
B) 14 days
C) 15 days
D) 21 days
E) 30 days

Correct Answer: D) 21 days

Explanation: Every company must send a copy of the audited financial statement to members and debenture trustees at least 21 days before the AGM (Section 136).

17. Listed companies must also publish their financial statements on their:

A) Notice Board
B) Annual Report
C) Official Website
D) Government Portal
E) CSR Dashboard

Correct Answer: C) Official Website

Explanation: Section 136(1) mandates that listed companies must also place their financial statements on their official website for public access.

18. Under Section 137, companies must file their financial statements with the Registrar within how many days of the AGM?

A) 15 days
B) 20 days
C) 25 days
D) 30 days
E) 45 days

Correct Answer: D) 30 days

Explanation: Section 137(1) requires companies to file a copy of the financial statement with the Registrar of Companies (ROC) within 30 days of the AGM.

19. Which section makes internal audit mandatory for certain classes of companies?

A) Section 128
B) Section 134
C) Section 135
D) Section 138
E) Section 139

Correct Answer: D) Section 138

Explanation: Section 138 mandates internal audits for specific classes of companies as prescribed, to evaluate and strengthen internal control systems.

20. Who can be appointed as an internal auditor under Section 138?

A) Only a Chartered Accountant
B) Only a Cost Accountant
C) Any professional as decided by the Board
D) Any employee of the company
E) Any external consultant

Correct Answer: C) Any professional as decided by the Board

Explanation: An internal auditor may be a Chartered Accountant, Cost Accountant, or any other professional as decided by the company’s Board of Directors under Section 138.