Section 70   [ View Judgements ]

Amendment of section 228


In section 228 of the principal Act,-



(a) in sub-section (1),-



(i) for the words "unless the company in general meeting decides otherwise, be audited", the words and figures "be audited by the company's auditor appointed under section 224 or" shall be substituted;



(ii) for the words "by a person qualified as aforesaid", the words "by the company's auditor or a person qualified as aforesaid' shall be substituted;



(b) in sub-section (2), for the words "not so audited", the words 'audited by a person other than the company's auditor" shall be substituted;



(c) after sub-section (2), the following sub-section shall be inserted, namely:-



"(3) (a) where a company in general meeting decides to have the accounts of a branch office audited otherwise than by the company's auditor, the company in that meeting shall for the audit of those accounts appointment as auditor of the company under section 226, or where the branch office is situated in a country outside India, a person who is either qualified as aforesaid or an accountant duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of country, or authorise the Board of directors to appoint such a person in consultation with the company's auditor;



(b) the person so appointed (hereafter in this section referred to as the branch auditor) shall have the same powers and duties in respect of audit of the accounts of the branch office as the company's auditor has in respect of the same;



(c) the branch auditor shall prepare a report on the accounts of the branch office examined by him and forward the same to the company's auditor who shall in preparing the auditor's report, deal with the same in such manner as he considers necessary;



(d) the branch auditor shall receive such remuneration and shall hold his appointment subject to such terms and conditions as may be fixed either by the company in general meeting or by the Board of directors if so authorised by the company in general meeting.



(4) Notwithstanding anything contained in the foregoing provisions of this section, the Central Government may, by rules made in this behalf, exempt any branch office from the provisions of this section to the extent specified in the rules and in making such rules the Central Government shall have regard to all or any of the following matters, namely:-



(a) the arrangement made by the company for the audit of accounts of the branch office by a person otherwise qualified for appointment as branch auditor even though such person may by an officer or employee of the company;



(b) the nature and quantum of activity carried on at the branch office during a period of three years immediately preceding the date on which the branch office is exempted from the provisions of this section;



(c) the availability at a reasonable cost of a branch auditor for the audit of accounts of the branch office;



(d) any other matter which in the opinion of the Central Government justifies the grant of exemption to the branch office from the provisions of this section.".

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