Page 316 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 13: Final Accounts for Companies

(ii) In case of any subsequent annual general meeting of the company, to the period Notes
beginning with the day immediately after the period for which the account was last
submitted and ending with a day which shall not precede the day of the meeting by
more than six months, or in cases where an extension of the meeting under the
second proviso to the sub-section (1) of Section 166, by more than six months and the
extension so granted.
4. The period to which the account aforesaid relates, is referred to in this Act as a ‘financial
year’ and it may be less or more than a calendar year, but it shall not exceed fifteen
months:
Provided that it may extend to eighteen months, where special permission has been
granted in that behalf by the Registrar.
As per Section 211 every profit and loss account and balance sheet of a company must show ‘true
and fair’ picture of the state of affairs of the company. For this, the balance sheet must be in the
form set out in the Part I of the Schedule VI and the requirements for the preparation of Profit
and Loss account given in the Part II of this Schedule must be followed.

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Caution To prepare final account by the sole trader or partnership firm is not a statutory
obligation. But as per Section 210 of the Companies Act, it is compulsory for every registered
company to prepare the final accounts.
As per Section 212 of the Companies Act if any company is a holding of another company, the
holding company has to attach with its balance sheet the following documents relating to its
subsidiary company.

(a) A copy of balance sheet and profit and loss account of the subsidiary company.
(b) A copy of Director’s Report.
(c) A copy of Auditor’s Report
(d) A statement of the holding company’s interest in the subsidiary company.

Section 213 deals the extension of the financial year of the holding company and its subsidiary
company.
The provisions of Section 214 relate to the rights of holding company’s representative and
members to inspect the books of accounts of the subsidiary company.
Section 215 relates to the authentication of balance sheet and the profit and loss account of a
company. As per the provisions of this section the final accounts of a company shall be signed on
the behalf of the board of directors by its manager or the 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.
As per the Section 216 of the Companies Act, the profit and loss account shall be treated as an
annexure to the balance sheet the auditor’s report as an enclosure thereto.

Section 217 provides that Auditor’s Report and Director’s Report shall be attached to the Balance
Sheet laid before the shareholders in the general meeting.
As per Section 218 there would be a penalty for improper issue, circulation or publication of
Balance Sheet or Profit and Loss account.
Section 219 deals with the right of the member to obtain copies of Balance Sheet and Profit and
Loss Account, Auditor’s Report and every other document required by law to be annexed or
attached to the Balance Sheet which is to be presented in the general meeting.

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