Accounts - Exceptions and modifications with which sub-section (1) applies to a foreign company - SRO 3216, - Companies Law

Notification : No. SRO 3216, dated 4-10-1957. Subject:- Accounts - Exceptions and modifications with which sub-section (1) applies to a foreign company SRO 3216.- In exercise of the powers conferred by the proviso to sub-section (1) of section 594 of the Companies Act, 1956 (hereinafter referred to as the Act ) the Central Government has directed that the requirements of clause ( a ) of sub-section (1) shall apply to a foreign company having a share capital subject to the exceptions and modifications specified below, namely : ( i ) A foreign company shall, in respect of its Indian business submit to the appropriate Registrar in triplicate its balance sheet and profit and loss account in such form, containing such particulars and including or having annexed or attached thereto such documents as under the provisions of the Act, it would, if it had been a company within the meaning of the Act, have been required to make out and lay before the company in general meeting. ( ii ) The working capital earmarked for its branch, if any, shall be shown in the balance sheet. ( iii ) The profit and loss account in respect of its Indian business shall disclose the net profit or loss for the year transfer to its principal office in the country of incorporation. ( iv ) The balance sheet and profit and loss account of the Indian business of the foreign company in terms of clause ( i ) shall be audited by such person or persons and in such manner as laid down in the Act. In regard to the said balance sheet and profit and loss account relating to a period on or before the 31st day of March, 1958, it shall be deemed to be sufficient compliance if such documents are audited by auditors of the foreign company in the country of its incorporation. ( v ) Omitted by GSR 489, dated 1-4-1961. ( vi ) The foreign company shall also submit to the appropriate Registrar three copies of the authenticated balance sheet and profit and loss account (including documents relating to every subsidiary of the foreign company) as submitted by it to the prescribed authority in the country of its incorporation under the provisions of the law in that country. ( vii ) The Government shall have authority, when there is difficulty in reconciling the balance sheet and profit and loss account of a foreign company submitted in accordance with clause ( i ), with the balance sheet and profit and loss account, filed by that company in the country of its incorporation, to seek clarification or demand the making of the balance sheet and profit and loss account, filed in that country, as far as practicable, in such form as it would, if it had been a company within the meaning of the Act, have been required to make out and lay before the company in a general meeting and the foreign company shall be bound to make such clarification or comply with such demand, as the case may be. ( viii ) In regard to a foreign shipping or an airlines company, it shall be deemed to be sufficient compliance of the provisions of Part II of Schedule VI to the Act, if the profit and loss account of such companies prepared in terms of clause ( i ) discloses under broad head the items of indirect expenditure (relating to an entire voyage or flight which cannot be directly charged against the Indian business of such companies) allocated on a reasonable basis. ( ix ) It shall be deemed sufficient compliance of the provisions of section 594 of the Act, if the balance sheet in respect of the period ending on or before the 31st day of December, 1956, are filed in the manner laid down in sub-section (3) of section 277 of the Indian Companies Act, 1913. ( x ) In the case of a foreign company which, if incorporated under the Act, would have been deemed to be a private company within the meaning of clause ( iii ) of sub-section (1) of section 3 of the Act. No person other than a member of the company concerned shall be entitled to inspect or obtain copies of ( a ) the profit and loss account of its Indian business submitted to the appropriate Registrar in terms of clause ( i ) hereof; ( b ) the profit and loss account submitted to the appropriate Registrar in terms of clause ( vi ) hereof.