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CA.Ganesh (Practicing Chartered Accountant) (308 Points)

19 December 2011

I have 3 queries. Please help me to clarify.
1. As per Sec 215(3) of Companies Act 1956 , BS and PL account shall be approved by BoD before they are signed on behalf of the Board in accordance with the provisions of this section and before they are submitted to the auditors for their report thereon Then how auditors report can be on the same date of Board meeting of approval of accounts?
2. I saw an audit report dated 30/9/2011. Is it possible if the date of AGM itself is 30/9/2011 ?
3. I have read that " Directors report shall be on or after the date of auditor's report" . I 'v come across a case in which Directors report is dated on 11/8/2010 and auditors report on 30/9/2010. Is it possible?

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VIDHYA RAMPURIA (LEGAL) (72 Points)
Replied 19 December 2011

Hi,

1. Please note that first the company prepare their accounts, then they forward the same to auditors who audit the accounts and give their report along with the final accounts. Section 215(3) speaks that the draft accounts which authenticated and is forwarded to the auditors. Then the audit starts which is a continuous process.

Then your query talks about the date of accounts and auditors report.

Once the audit repot is received, a Board Meeting is held in which the Directors places both accounts and audit report. The accounts is first signed by the Directors and then forwarded to the auditors who sign and give their report (which is ready with them). (Auditors are invited in that Board Meeting)

2. According to Section 171 (1) of the Companies Act, 1956 at least 21 days (clear) notice in writing is given before holding the Annual General Meeting.

But Section 171(2) provides that meeting can be called at shorter notice provided consent is received from all the shareholders. Therefore many companies take advantage of this provision of the Act, since shorter notice has not been defined in the Act.

3. According to me, it is not according to the provisions of the Companies Act, 1956.

Hope this will help you...

If you have further query, please revert back.

Regards

Vidhya

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