Section 378ZE Companies Act 2013 - Books of Account
Section 378ZE of the Companies Act, 2013 lays down the core books of account requirements for a Producer Company. It forms part of Chapter XXIA, Part VI dealing with finance, accounts and audit of Producer Companies.
| Act | Companies Act, 2013 |
|---|---|
| Chapter | Chapter XXIA - Producer Companies |
| Part | Part VI - Finance, Accounts and Audit |
| Section | 378ZE |
| Subject | Books of account |
| Effective date | 11 February 2021 |
What Section 378ZE requires
Every Producer Company must keep proper books of account at its registered office. The records must cover money received and spent, sales and purchases of goods, instruments creating liability, assets and liabilities, and specified cost particulars where the Producer Company carries on production, processing or manufacturing.
Sub-section (2) further provides that the balance sheet and profit and loss accounts of the Producer Company are to be prepared, as far as may be, in accordance with Section 129 of the Companies Act, 2013. Section 129 is the general provision governing financial statements and, among other matters, requires applicable financial statements to present a true and fair view and comply with notified accounting standards and the prescribed form.
Text of Section 378ZE - Books of account
(1) Every Producer Company shall keep at its registered office proper books of account with respect to--
(a) all sums of money received and expended by the Producer Company and the matters in respect of which the receipts and expenditure take place;
(b) all sales and purchase of goods by the Producer Company;
(c) the instruments of liability executed by or on behalf of the Producer Company;
(d) the assets and liabilities of the Producer Company;
(e) in case of a Producer Company engaged in production, processing and manufacturing, the particulars relating to utilisation of materials or labour or other items of costs.
(2) The balance-sheet and profit and loss accounts of the Producer Company shall be prepared, as far as may be, in accordance with the provisions contained in section 129.
Meaning and practical scope
Money received and spent
The books should identify receipts and expenditure and the matters to which each receipt or payment relates. This creates an accounting record of the Producer Company's inflows and outflows.
Sales and purchases of goods
Records must cover the Producer Company's sales and purchases of goods. For a Producer Company dealing with agricultural or other primary produce, these records form an important part of its financial trail.
Instruments of liability
The company must maintain records of instruments of liability executed by it or on its behalf. This requirement supports proper identification of financial obligations undertaken by the Producer Company.
Assets and liabilities
Proper books must record the assets owned or controlled by the Producer Company and its liabilities. These records support preparation of the company's financial statements.
Materials, labour and other cost items
If the Producer Company is engaged in production, processing or manufacturing, its books must also contain particulars concerning utilisation of materials, labour and other items of cost.
Connection with Section 129
Section 378ZE(2) expressly connects a Producer Company's balance sheet and profit and loss accounts with Section 129. Accordingly, Section 378ZE should not be read in isolation when preparing the financial statements of a Producer Company. The applicable requirements of Section 129, accounting standards and the prescribed financial statement framework should also be checked.
Official legal resources
For authoritative statutory text and current notifications, readers should verify the provision from the official India Code text of the Companies Act, 2013 and the Ministry of Corporate Affairs.