ADJOURNED AGM AND APPROVAL OF ACCOUNTS

[Sushil Choraria]

 Respected members

 

Please give advice on the following issue whether compliance of  companies act is proper or not ?:-

1.       A  company issued notice for AGM  to be held on 29.9.2011. But could not approve the   

             account    as the audited accounts  could not be audited. So they adjourned the meeting sine-die.   

            Now can  the  accounts be approved in the meeting in lieu of the adjourned meeting. If yes then   

            what will  be the date of AGM to be filled in then annual return, for filing  20B and 23AC/23ACA  .   

            will it be  29.09.2011 or the date of meeting held in lieu of the adjourned meeting.

 

2         That on repeated request since July 2011, to the Company’s statutory auditor, they did not response and did not audit the accounts of the company for the year 2010-2011,

3         That finally the auditor placed their resignation/NOC on 31^st October 2011 to the company.

4         Now the company HAS   moved in the following manner d.

a)      Serve a shorter notice (approved by the share holders) on 31/10/2011 for EGM to be held on 1^st November’2011, for appointment of New Auditor .

b)      Appointed the new auditor on 1^st November’2011.

c)       Got the Accounts signed by the auditor on 2^nd November’2011

d)      Served a notice for AGM (to be held on 24^th. November’2011) on 2^nd November 2011.

e)      Filed the Income Tax Return on 16^th. November’2011

f)       Preparing to Hold the AGM and Board Meeting on 24/11/2011

g)      Willing to File the Annual Return and Balance sheet with ROC on or after 24^th. November’2011

h)      Thereafter the Company will file  a petition to the Company Law Board for compounding of offence for not holding the AGM within due date i.e. on 29-09-2011.

CA SUSHIL KUMAR  JAIN (CHORARIA)

R.S.CHORARIA & ASSOCIATES

11, CLIVE ROW, 5TH FLOOR

KOLKATA- 700 001

PHONE: 033-22424761

             033-22105341

[Krishna Moorthy K]

Dear Mr.Choraria,

 

I am not able to understand that at the first instance when the company ought to have sent  the notice of the AGM (possibly with 21 days clear notice), they must have known that the accounts could not be audited in time and hence not able to convene the AGM within the statutory period of on or before 30^th September, 2011.  Hence, where there is a question of sending the AGM notice to the shareholders and adjourn the meeting for want of audited accounts.

 

Ideally, the following steps could have been taken by the Company in such a situation to take care of  the relevant provisions of the Companies Act, 1956 without any violation :-

 

1)      As soon as the company came to  know that the accounts could not be audited in time to get it approved by the board and placed before the AGM on or before 30^th September, 2011, convene a board meeting  sometime in August, 2011 itself, to consider approaching the concerned Registrar of Companies to seek extension of time for holding the Annual General Meeting

2)      Make representation to the concerned ROC for the above purpose attaching a certified copy of the board resolution ;

3)       Then, after getting the resignation letter/NOC from the existing statutory auditors, convene a board meeting to consider appointment of new statutory auditors, subject to the approval of shareholders at a general meeting and take a decision to convene the general meeting at a shorter notice in terms of the articles of association of the company/Section 172 of the Companies Act, 1956, as the case may be ;

4)      Hold the general meeting (with the consent of the shareholders in terms of either the articles of association or the provisions of Section 172 of the Companies Act, 1956 ;

5)      Request the statutory auditors to get the unaudited accounts audited and submit their reports thereon ;

6)      Get the audited accounts approved by the board along with the report of the auditors and directors’ thereon ;

7)      Convene the annual general meeting (at a shorter notice – here again following the procedures stated above) and adopt the audited accounts – this can well be completed on or before 31^st December, 2011 ;

8)      Hopefully, by this time, you would have received the approval of the concerned ROC for holding the AGM on or before 31^st December, 2011 ;

9)      E-file the relevant forms – 23AC/23ACA and 20B within the stipulated time with the concerned R.O.C.

 

In case by 31^st December, 2011, the company had not received the approval of ROC giving extension of time up to 31^st December, 2011, then approach Company Law Board for compounding of the offence pursuant to Section 621A of the Companies Act, 1956.

 

Simultaneously, if there was no fault on the side of the Company in providing the required explanations/information to the existing statutory auditors, the company should have taken up the matter strongly with the Institute of Chartered Accounts of India, New Delhi and the Ministry of Corporate Affairs, New Delhi about this reckless attitude of the auditors, who were appointed by the shareholders to conduct the auditing of the books of accounts of the Company.   If,  for any reason, they are not satisfied, they should have resigned from the position well in time so as to allow the company to appoint  new statutory auditors for getting the accounts audited well in time.

 

With warm regards,

--
forum4ca is a Google Group of eServe online for the benefit of CA and other professionals. It is especially meant for written discussion & circulate information within group members. The mail may contain such research/advice/opinion/information/fact provided by any member and are subject to the accuracy and of the description of facts.The forum4ca, do not claim that contains in mail/information obtained after reading as a complete and accurate disclosure of relevant facts. Further this Group’s Owner/Moderator/Member are not liable for any damages or costs suffered due to action/transaction based on information on this Group.
 
To join and/or to post to this group send email: foru...@googlegroups.com
To unsubscribe from this group, send email to:forum4ca+u...@googlegroups.com
For more options, visit this group at:http://groups.google.co.in/group/forum4ca or www.eserveonline.net