16.1.11 Separate Audited Financial Statement before Court Order of Merger


A Company has applied to the Court for merger with another Company and the order from the Court was made after expiry of submission due date of its annual audited financial statement to the members as well as to the Commission. The Company has not submitted its separate annual audited financial statement on its due date pertains to the year end only due to reason that the case of merger was pending in the Court.

Chronological Order of Events:

Date of Application to the Court November 14, 2009
Effecting Date of Merger (in application) November 30, 2009
Financial Year End (closing date) December 31, 2009
Audited Annual Account Submission Due Date April 30, 2010
Court Order Date (for approval) July 14, 2010

As per our understanding, at the time where the Company was supposed to submit its audited accounts should submit its under discussion accounts separately (non merged accounts) on the due date even if the matter of merger was sub-judice in the court, whereas subsequent to the order of Court and approval the merger was passed and should disclose the facts in the note to the financial statement.

We think that the merger has nothing to do with the filing of accounts and the accounts should be presented to the members at the time allowed by the Ordinance or the extended time allowed by the Commission.

We believe that the company has violated the law by not submitting the said accounts in its time as required under section 233 of the Companies Ordinance, 1984.

We shall be grateful for your valuable comments on the aforesaid matter as to whether the Company should submit the separate audited accounts on or before April 30, 2010 or not.


For ready reference the Committee likes to draw your attention to the following clauses of section 233 of the Companies Ordinance 1984:

(1)    The directors of every company shall at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year lay before the company in annual general meeting a balance sheet and profit and loss account or in the case of a company not trading for profit an income and expenditure account for the period, in the case of the first account for the period since the incorporation of the company and in any other case since the preceding account, made up to a date not earlier than the date of the meeting by more than four months:

Provided that, in the case of a listed company the Commission, and in any other case the registrar, may for any special reason, extend the period for a term not exceeding one month.

(2)     The period to which the accounts aforesaid relate shall not exceed twelve months except where special permission has been granted in that behalf by the registrar.

(5)     A listed company shall, simultaneously with the dispatch of the balance sheet and profit and loss account together with the reports referred to in sub-section (4), send five copies each of such balance sheet and profit and loss account and other documents to the Commission, the stock exchange and the registrar.

Based on above, the Committee is of the opinion that the Company should have complied with the above sections of the Companies Ordinance, 1984.

(November 8, 2010)