Subsidiary accounts shall display on company's website

As per the provisions of clause (a) of fourth proviso to section 136(1) which require every company having a subsidiary or subsidiaries to place on its website, if any, separate audited accounts in respect of each of its subsidiary, 

Further, fourth proviso to section 137(1) requires that a company shall attach along with its financial statements to be filed with the Registrar of Companies, the accounts of its subsidiary(ies) which have been incorporated outside India and which have not established their place of business in India.

Clarification has been sought on –

(a) Whether a company covered under above provisions can place/file unaudited accounts of a foreign subsidiary if the audit of such foreign subsidiary is not a mandatory legal requirement in the country where such foreign subsidiary has been incorporated and such audit has not been conducted  

and

(b) Whether accounts of such foreign subsidiary would need to be as per format under Schedule III/Accounting Standards or the format as per country of incorporation of the foreign subsidiary would be sufficient.

It is clarified that in case of a Foreign subsidiary, which is not required to get its accounts audited as per legal requirements prevalent in the country of its incorporation and which does not get such accounts audited, the holding/parent Indian may place/file such unaudited accounts to comply with requirements of Section 136(1) and 137(1) as applicable. These, however would need to be translated in English, if the original accounts are not in English.

Further, the format of accounts of foreign subsidiaries should be, as far as possible, in accordance with requirements under Companies Act, 2013. ln case this is not possible, a statement indicating the reasons for deviation may be placed/held along with such accounts.

    

Read the full Circular dated 21.07.2015 @ http://www.mca.gov.in/Ministry/pdf/General_Circular_11-2015_21072015.pdf

Accounts Under FEMA

1) Account :

Means, Savings, Current, Recurring, Fixed Deposit Opened And Maintained        under Non resident(External) Account Scheme(NRE Account), Foreign currency(Non- Resident)Account   Banks  Scheme (FCNR-B Account or Non-Resident(ordinary) Account Scheme (NRO Account)

2) EEFC Account :     

 Means the accounts referred to in the FEM(Foreign Currency Accounts  by A person resident in India) Regulations, 2000

3) Existing Account     :      Means an Account held on 31st March , 2002

4) Existing Account :     

 Means an Account Maintained on the date of  commencement of the regulations

5) FCNR Account   :    

i) Means an FCNR account opened and maintained in accordance with the FEM( Deposits) Regulations, 2000

ii) Shall have the same meaning as assigned to it in FEM(Deposits) Regulations, 2000

6) FCNR(B)Account  : 

Means a Foreign Currency Non-Resident (Bank) account referred to in clause (ii) of sub-regulation(1) of Regulation 5

7) Foreign Currency Account :

Means an account held or maintained in currency other than the currency of India or Nepal or Bhutan

8) NRNR Account     :

Means a Non-resident Non- repatrible account referred to in clause(iv) of sub-regulation(1) of Regulation 5

9) NRO Account    :

Means a Non- resident ordinary account referred to in clause (iii) of sub-regulation (1) of Regulation 5

10) NRSR Account   :

Means a Non -resident Special Rupee account referred to in clause (v) of sub - regulation(1) of Regulation 5

11) NRE Account :

  i) Means a non-resident Eternal account referred to in clause (i) of sub-regulation (1) of   Regulation 5

    ii) Means an NRE account opened and maintained in accordance with the FEM(Deposits) Regulations, 2000

12) RFC Account :

Means the accounts referred to in the FEM(Foreign Currency Accounts by a person Resident in India) Regulations, 2000

Appointment of First Auditors

Appointment of Auditors in a company is a vital part in the running of a company. Without Auditors, we could not able to get our accounts audited and filed with Registrar of companies as per the compliance of Section 220 of the Companies Act,1956.

O.K.Let's move to our topic.

As per Section 224(5), the first Auditor or Auditors of a company shall be appointed by the Board of Directors by passing a Board resolution within one month of the date of Incorporation of the Company; and the auditor or auditors so appointed shall hold office until the conclusion of the First Annual General Meeting.

If the Board of Directors fail to appoint the Auditors within one month,they have to appoint the Auditors in the company General Meeting.There is notneed to file Form 23B for the appointemnt of First Auditor.

The Appointed First Auditor shall not suffer any disqualifications Covered U/s.226(3) of the Companies Act,1956  and the Auditor or Auditors so appointed shall hold office until the conclusion of the First Annual General Meeting.