Section 220 of the Companies Act, 1956 provides for the manner in which the annual accounts of a company are laid before annual general meeting for adoption by shareholders and filed with the Registrar. The MCA vide its circular dated 13th January, 2003, had directed the grounds and manner in which the accounts can be reopened/revised by companies. The same circular also clarified that a company cannot lay more than one set of the annual accounts contrary to circular dated 13th January, 2003.
However, it has been observed by the MCA that a few companies are violating the rules as set out in the circular. Thus, the MCA vide its circular dated 22nd November, 2010[1] directed the Registrar of Companies to keep a check on such defaulting companies and not accept such accounts except in accordance with provision of Section 220 of the Companies Act read with the 2003 circular. Earlier in the extraordinary general meeting or in the subsequent annual general meeting of a company, a company could reopen and revise its accounts even after their adoption in the annual general meeting and filing with the Registrar of Companies in order to comply with technical requirements of any other law to achieve the object of exhibiting true and fair view.
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