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Signing of Balance Sheet

Shridhi Jain (Company Secretary) (1678 Points)

31 March 2011

Dear Members,

This is the first time that I am going to sign the Balance Sheet of my company (pvt. co.).

Being a CS and that too fresher, I dont know much. Kindly help me on what aspects to see in a b/sheet n p& l before signing it.

Also any other relevant information that is helpful for me.

Thanks....

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8 Replies

Sweety Rai (Nil) (61 Points)
Replied 31 March 2011

AS PER MY VIEW U MUST REQUIRED TO SEE EVERY ITEM MENTION IN THE BALANCE SHEET,

BT MORE IMPOTANT ITEMS RE LOAN ( BOTH TYPES), APPLICATION MONEY, RESERVES.

1 Like

Jaideep (Service) (1368 Points)
Replied 31 March 2011

Further to sweety's point I would like to add

go through related party transaction and check the relevant compliances,

go through audit report

entries in Register 301

Regards

Jaideep Pandya

2 Like

Siyaram Kumar (CA FINAL/ Jr. Superintendent(Accounts) IIT BHU VARANASI) (97 Points)
Replied 31 March 2011

There are some provisions of Companies Act 1956, requires Signing of Balance Sheet by Company Secretary.

cases are as under:

1. By signing the annual accounts, a Company Secretary does not incur liability for wrong entries in the books of account or falsification of accounts. Section 215 does not seek to create a liability only for those who sign the accounts. The purpose of section 215 seems to be what is stated in its heading, namely authentication of balance sheet and profit and loss account. As rightly stated by the MCA in its circular No. 7 of 1972, dated 12 May, 1972, that the authentication by the Secretary is "on behalf of the board of directors" and not in his personal capacity, the Secretary can be held responsible regarding errors etc only as an "officer" of the company within the meaning of section 628 and not because of authentication by him under section 215 as such.

2. Where, however, the Secretary is charged with the responsibility of maintaining the accounts and also assisting the auditor at the time of auditing, he cannot conceivably escape consequences of any wrong statement in the accounts. The signatories to the annual accounts sign them 'on behalf of the board of directors' vide section 215(1) and (3).

3. Further sub-section (3) expressly provides that the Financial Statements shall be 'approved by the Board' before they are signed on its behalf. This makes it clear that if any liability arises out of the Financial Statements it should attach to all the directors (besides the Secretary) who approve them. Sections 209, 211, 212, etc. which relates to Financial Statements of the company and 'true and fair view' contain specific penal provisions in regard to any default in complying with the requirements of those sections. A Company Secretary in his capacity as Secretary cannot approve the accounts under the extant Act.

4. So far as the penal liability under section 628 is concerned, mens rea is an essential ingredient of this provision. Before any person is convicted of an offence under this section it will have to be, therefore, established that such person has made a false statement, or omitted any material fact, 'knowingly'. "

You can act accordingly in view of above provisions.All the queries are welcomed at siyansh.vns @ gmail.com.

Regards,

Siya

3 Like

rohit (CA Finalist) (480 Points)
Replied 31 March 2011

Good Luck

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 31 March 2011

Agreed with siya sir ...

Just go through the balance sheet and P & L and just check the trend in individual items of blance sheet .Movement in item's of balance sheet should be in line with trend and there should not be much fluctuation in any item. Same process should be follow in Profit & loss.( In short Trend analysis, Ration analysis.)

Regards

Madhusudan

1 Like

Jyotika (study study n study) (147 Points)
Replied 01 April 2011

Dear Shridhi,

Please check where is the major change from last year.

Concntrate majorily on paid up capital, loan secured/unsecured, debentures if any, Loan and advances , related party transactions and other important factors you will get from auditors report and notes to accounts, since it will be definetly the audited balance sheet most of the major aspects must have be taken care of from auditors. still you should check above mentioned things and their compliances.

thanks

csjyotika

1 Like

SkDash (CS (Member) CWA (Final)) (909 Points)
Replied 01 April 2011

Jain- First congrats

Just downloaded one two balance sheet from the website adn see what are all there. And other thig- one point every CS should see that the provisions of all Accounting Standards are being complied with. Nothing else- Do check before the final print

1 Like

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 01 April 2011

I Think a Compan y secratry should be much bothered about compliances. Therefore in my opinion with keeping in mind movement in items of B/s & p&l you should design what are the compliance requirement is...and whether the same is followed or not ..

Regards

Madhusudan