Tag Archives: Financial Statements

Serious Penal Consequence of late Annual Filing – landmine ahead


[The law stated in this post is effective from the 7th day of May 2018]

There is a perception that filing of financial statements and other documents with additional fee absolve the company from consequences under section 92, section 137 and conditional exemption given to certain companies by certain notifications issued by the Ministry of Corporate Affairs.

This is also a general view of the companies that any extension granted for the filing of the financial statements and other documents without additional fee grant immunity to the companies from its liabilities under mentioned provisions.

I beg to differ, conditionally.

Continue reading

Advertisements

Copies of Financial Statements – post 9th February 2018


The Companies Amendment Act, 2017 read with notification dated 9th February 2018 amended law related to the rights of a member to copies of audited financial statements under Section 136 of the Companies Act, 2013. Section 136, in its original form, as applicable from 1st April 2014 until 8th February 2018. We shall discuss amended section 136 here.

Continue reading

Connection of Director’s Disqualification to Fraud


Disqualification of directors certainly is a hot topic among professionals practising corporate laws. Irrespectively of popular perception, the list compiled and released by Ministry of Corporate Affairs does not confer any disqualification to any director. These directors were already disqualified. In a serious violation, many of these directors might have failed to communicate about their disqualification to companies appointing or reappointing them after the actual date of disqualification. Such failure has penal consequences. This blog post will discuss serious consequences of the failure of compliance with law and procedures after incurring disqualification by a director.

Continue reading

That Audit Report


Indian corporate world was shocked and corporate governance became a question when on 20th October 2014, M/s. R. H. Modi  & Co., Chartered

Public Notice by Auditors

Public Notice by Auditors

Accountants, auditor of C. Mahendra Exports Limited published a public notice in newspaper. It was alleged that the company “in a complete illegal and malafide manner filed, uploaded and circulated the Annual Report with the financial results of the company for financial year 2014 – 15 and the auditor report dated 7th September 2015 purported that the financial statements have been audited and Auditors Report signed by us (M/s. R. H. Modi  & Co., Chartered Accountants).

The auditor in this public notice claimed that these financial statements have not been finalised and audited by them. The auditor claimed that despite their strong objection to the passing of company’s account in their present form, the same have been passed by the shareholders of the company in annual general meeting held on 26th September 2015.

The company filed its clarification before stock exchanges, which is available in site of Bombay Stock Exchange here and site of National Stock Exchange here. The company not only stated facts from their side but also raised several questions on point of law.

According to facts mentioned by the company, Managing Director and Statutory Auditors did not sign the financial statements and Auditors Report. The company presented following interesting queries:

  1. Can the auditor refuse to sign the auditor’s report due to dispute between the promoters?
  2. Can the Auditor not sign the Audit Report if the MD does not sign the accounts?

Fully clarification written by the company is worth academic reading.

This blog does not want to discuss on the matter which may soon go to inquiry by relevant professional bodies and regulators. However, development on this matter may be of academic interests.

Reply by Company P.1

Reply by Company P.1

Reply by Company P.2

Reply by Company P.2

Reply by Company P.3

Reply by Company P.3

Placing and Filing of Financial Statements of Foreign Subsidiaries


Indian Ministry of Corporate Affairs on 21st July 2015 came out with another clarification in form of General Circular 11 of 2015.

According to clause (a) of fourth proviso to Section 136(1), every company having a subsidiary or subsidiaries shall,—

(a) place separate audited accounts in respect of each of its subsidiary on its website, if any;

(b) provide a copy of separate audited financial statements in respect of each of its subsidiary, to any shareholder of the company who asks for it.

Continue reading

Shorter circulation of Financial Statements


Indian Ministry of Corporate Affairs on 21st July 2015 came out with another clarification in form of General Circular 11 of 2015.

Proviso to sub – section (1) of Section 101 state, “a general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five percent of the members entitled to vote at such meeting”.

Continue reading

FINANCIAL STATEMENT TO MEMBERS AND PUBLIC


As discussed earlier here according to Section 136, a copy of the financial statements, including consolidated financial statements, if any, auditor’s report and every other document required by law to be annexed or attached to the financial statements, which are to be laid before a company in its general meeting, shall be sent to every member of the company, to every trustee for the debenture-holder of any debentures issued by the company, and to all persons other than such member or trustee, being the person so entitled, not less than twenty-one days before the date of the meeting. [Section 136(1)]

Statement containing salient features of financial statements:

In the case of a listed company, the provisions of this section shall be deemed to be complied with, if the copies of the documents are made available for inspection at its registered office during working hours for a period of twenty-one days before the date of the meeting and a statement containing the salient features of such documents in the prescribed form or copies of the documents, as the company may deem fit, is sent to every member of the company and to every trustee for the holders of any debentures issued by the company not less than twenty-one days before the date of the meeting unless the shareholders ask for full financial statements. [First Proviso to Section 136(1)]

Continue reading