3.4       Query

Interpretation of Some  Provisions of the

Companies Act, 1956

Section 209(4A) of the Companies Act,  1956 as amended prescribes for preserving the books and records by every company for a certain period, whilst the preamble to the section speaks of books to be kept by a Company.

In as much as under Section 227(3) (b) of the Act, an auditor has to report as to proper books of account having been kept by the company as required by law, which obviously has reference to Section 209. It appears that the auditor in thus reporting, is additionally required to satisfy himself as to preservation of the records in the manner laid down therein.

            What is the scope of the auditor’s statement under Section 227(3) (b) in relation to Section 209(4A) of the Act?

                                                                     Opinion                                          January 30,1962

The report of the auditor under Section 227 is not required to cover the question of the Company’s compliance with Section 209(4A). The Committee is of the view that when an auditor refers in his report to proper books of account having been kept by the company, he refers to Sub-sections (1), (2) and (3) of Section 209 of the Act and not to other Sections.

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