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Explanatory statement required

sachin.g.bagmar (Articled Assistant) (41 Points)

13 September 2011

Please forward format of explanatory statement u/s 215(2) for non complaince u/s 215(1)

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G.L.Subhramanian (PCS) (206 Points)
Replied 13 September 2011

Hi Sachin,

The explanatory statement under 173 (2) is different from the statement you require for non-compliance under section 215 (1).

173 (2) talks about explanatory statement to be attached to the notice of the meeting where the business to be transacted is special business.

215 (2) talks about statement to be prepared and signed by a director in India explaining the reason for non-signing of balance sheet by another director.

There is no fixed format as such as the reason varies from one case to another.

I have prepared a draft statement.

Statement under Section 215 (2) for non-compliance under Section 215 (1) of the Companies Act, 1956:

Section 215 (1) of the Companies Act, 1956 says that "every balance sheet and every profit and loss account of a company shall be signed on behalf of the Board of directors by its manager or secretary, if any, and by not less than two directors of the company one of whom shall be a managing director where there is one".

Section 215 (2) says that "In the case of a company not being a banking company, when only one of
its directors is for the time being in India, the balance sheet and the profit and loss account shall be signed by such director; but in such a case there shall be attached to the balance sheet and the profit and loss account a statement signed by him explaining the reason for non-compliance with the provisions of subsection (1)".

Mr.____, Mr. ____ and Mr. ____ are the present Directors of our Company. Mr. ____ and Mr. ____are not presently available in India due to ________________ (reason). Hence, to comply with the provisions of Section 215 (2), this statement is attached to the balance sheet and the profit and loss account.

Date: (Signature)

Place: (signed by the Director in India)

Regards,

Subbu