Producer Company Audit Check List

Narendra Kumar

02 Dec, 2020

Producer Company shall carry out an internal audit at such interval specified in the article by a Chartered accountant. In this article, we will discuss the audit requirement for the producer company.

What is Producer Company?

Producer Company means a body corporate which have objects and activities specified in Section 581B and who has registered as producer Companies under this Act.

The conditions need to be fulfilled by Producer condition:

• The owner shall give to the person who is engaged in an activity connected or related to primary production.
• The Members need to be a primary producer.
• Producer Companies can be termed as “Companies with Limited Liability”. The liability of the members will be limited to a number of unpaid shares.
• Name of the company shall end with the words “Producer Company Limited”
• The producer company can be treated as Private Limited Company for the purpose of application of law and administration of the company.
• The limit of the maximum number of members is not applicable to these Companies.

Audit and Auditors of the Producer Company:

All Producer Companies shall place annual account along with auditors report before the annual general meeting.

Producer Company shall appoint Auditor at its Annual General Meeting.

Producer Company shall conduct an internal audit of its accountant the interval specified in articles of the Company. The internal audit shall be carried out by the Chartered accountant defined in clause (b) of subsection 2 of Section 2 the Institute of Chartered Accountants Act 1949.

Duties of Auditor:

• Auditor shall without prejudice the provisions of Section 227 the following matter shall report to Auditors report;
• Any due debt and bad debt of the Company.
• Verification of Cash Balance and securities
• Details of assets and liabilities
• Any transaction contrary to the provisions of the Act
• The details of loan given to directors by the producer company.
• The details of donations and subscriptions are given by the producer company
• Any other matters as may be considered necessary by the Auditor.

Every Producer Companies shall attach independent auditor report by a chartered accountant. Any qualification of the auditor shall be duly mentioned in the report.

Preparation of Annual Return of Producer company :

Every producer Companies shall prepare annual return which shall contain the following:

Audited balance sheet and profit and loss accounts

Director’s Report

Independent Auditor Report

Certificate from Auditor.

Filing of annual Return of producer company:

Every Producer Companies shall file Annual General Meeting proceeding along with Director’s Report, the audited Balance sheet, and the profit and loss account along with Auditors report with Registrar within sixty (60) days of the date of Annual General Meeting of the producer Company.

The above shall be filed with an annual return along with the required fees.

Penalties:

Any below-mentioned default by Directors of the Producer Company amount to the penalty:

• handing over the custody of the books of account
• fails to convene annual general meetings or other general meetings

The company may be punishable by the fine Rupee 1 Lakh. If the default is in the nature of continuance than the everyday penalty of rupees 10,000 is levied till the default continues.