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 CHAPTER IX

ACCOUNTS OF COMPANIES
 
 
 
128.Punishment for failure to distribute dividends.

(1) Every company shall prepare and keep at its registered office books of
account and other relevant books and papers and financial statement for every financial year
which give a true and fair view of the state of the affairs of the company, including that of its
branch office or offices, if any, and explain the transactions effected both at the registered
office and its branches and such books shall be kept on accrual basis and according to the
double entry system of accounting:
Provided that all or any of the books of account aforesaid and other relevant papers
may be kept at such other place in India as the Board of Directors may decide and where such
a decision is taken, the company shall, within seven days thereof, file with the Registrar a
notice in writing giving the full address of that other place:
Provided further that the company may keep such books of account or other relevant
papers in electronic mode in such manner as may be prescribed.
(2) Where a company has a branch office in India or outside India, it shall be deemed
to have complied with the provisions of sub-section (1), if proper books of account relating
to the transactions effected at the branch office are kept at that office and proper summarised
returns periodically are sent by the branch office to the company at its registered office or the
other place referred to in sub-section (1).
(3) The books of account and other books and papers maintained by the company
within India shall be open for inspection at the registered office of the company or at such
other place in India by any director during business hours, and in the case of financial
information, if any, maintained outside the country, copies of such financial information shall
be maintained and produced for inspection by any director subject to such conditions as
may be prescribed:
Provided that the inspection in respect of any subsidiary of the company shall be done
only by the person authorised in this behalf by a resolution of the Board of Directors.
(4) Where an inspection is made under sub-section (3), the officers and other employees
of the company shall give to the person making such inspection all assistance in connection
with the inspection which the company may reasonably be expected to give.
(5) The books of account of every company relating to a period of not less than eight
financial years immediately preceding a financial year, or where the company had been in
existence for a period less than eight years, in respect of all the preceding years together with
the vouchers relevant to any entry in such books of account shall be kept in good order:
Provided that where an investigation has been ordered in respect of the company
under Chapter XIV, the Central Government may direct that the books of account may be kept
for such longer period as it may deem fit.
(6) If the managing director, the whole-time director in charge of finance, the Chief
Financial Officer or any other person of a company charged by the Board with the duty of
complying with the provisions of this section, contravenes such provisions, such managing
director, whole-time director in charge of finance, Chief Financial officer or such other person
of the company shall be punishable with imprisonment for a term which may extend to one
year or with fine which shall not be less than fifty thousand rupees but which may extend to
five lakh rupees or with both.
 
 
 
129.Financial statement.

(1) The financial statements shall give a true and fair view of the state of affairs
of the company or companies, comply with the accounting standards notified under section
133 and shall be in the form or forms as may be provided for different class or classes of
companies in Schedule III:
Provided that the items contained in such financial statements shall be in accordance
with the accounting standards:
Provided further that nothing contained in this sub-section shall apply to any insurance
or banking company or any company engaged in the generation or supply of electricity, or to
any other class of company for which a form of financial statement has been specified in or
under the Act governing such class of company:
Provided also that the financial statements shall not be treated as not disclosing a true
and fair view of the state of affairs of the company, merely by reason of the fact that they do
not disclose—-
(a) in the case of an insurance company, any matters which are not required to be
disclosed by the Insurance Act, 1938, or the Insurance Regulatory and Development
Authority Act, 1999;
(b) in the case of a banking company, any matters which are not required to be
disclosed by the Banking Regulation Act, 1949;
(c) in the case of a company engaged in the generation or supply of electricity,
any matters which are not required to be disclosed by the Electricity Act, 2003;
(d) in the case of a company governed by any other law for the time being in
force, any matters which are not required to be disclosed by that law.
(2) At every annual general meeting of a company, the Board of Directors of the
company shall lay before such meeting financial statements for the financial year.
(3) Where a company has one or more subsidiaries, it shall, in addition to financial
statements provided under sub-section (2), prepare a consolidated financial statement of the
company and of all the subsidiaries in the same form and manner as that of its own which
shall also be laid before the annual general meeting of the company along with the laying of
its financial statement under sub-section (2):
Provided that the company shall also attach along with its financial statement, a separate
statement containing the salient features of the financial statement of its subsidiary or
subsidiaries in such form as may be prescribed:
Provided further that the Central Government may provide for the consolidation of
accounts of companies in such manner as may be prescribed.
Explanation.—For the purposes of this sub-section, the word “subsidiary” shall include
associate company and joint venture.
(4) The provisions of this Act applicable to the preparation, adoption and audit of the
financial statements of a holding company shall, mutatis mutandis, apply to the consolidated
financial statements referred to in sub-section (3).
(5) Without prejudice to sub-section (1), where the financial statements of a company
do not comply with the accounting standards referred to in sub-section (1), the company
shall disclose in its financial statements, the deviation from the accounting standards, the
reasons for such deviation and the financial effects, if any, arising out of such deviation.
(6) The Central Government may, on its own or on an application by a class or classes of
companies, by notification, exempt any class or classes of companies from complying with any
of the requirements of this section or the rules made thereunder, if it is considered necessary to
grant such exemption in the public interest and any such exemption may be granted either
unconditionally or subject to such conditions as may be specified in the notification.
(7) If a company contravenes the provisions of this section, the managing director, the
whole-time director in charge of finance, the Chief Financial Officer or any other person charged
by the Board with the duty of complying with the requirements of this section and in the
absence of any of the officers mentioned above, all the directors shall be punishable with
imprisonment for a term which may extend to one year or with fine which shall not be less than
fifty thousand rupees but which may extend to five lakh rupees, or with both.
Explanation.—For the purposes of this section, except where the context otherwise
requires, any reference to the financial statement shall include any notes annexed to or
forming part of such financial statement, giving information required to be given and allowed
to be given in the form of such notes under this Act.
 
 
 
130.Re-opening of accounts on court’s or Tribunal’s orders.

(1) A company shall not re-open its books of account and not recast its financial
statements, unless an application in this regard is made by the Central Government, the
Income-tax authorities, the Securities and Exchange Board, any other statutory regulatory
body or authority or any person concerned and an order is made by a court of competent
jurisdiction or the Tribunal to the effect that—
(i) the relevant earlier accounts were prepared in a fraudulent manner; or
(ii) the affairs of the company were mismanaged during the relevant period,
casting a doubt on the reliability of financial statements:
Provided that the court or the Tribunal, as the case may be, shall give notice to
the Central Government, the Income-tax authorities, the Securities and Exchange Board
or any other statutory regulatory body or authority concerned and shall take into
consideration the representations, if any, made by that Government or the authorities,
Securities and Exchange Board or the body or authority concerned before passing any
order under this section.
(2) Without prejudice to the provisions contained in this Act the accounts so revised
or re-cast under sub-section (1) shall be final.
 
 
 
131.Voluntary revision of financial statements or Board’s report.

(1) If it appears to the directors of a company that—
(a) the financial statement of the company; or
(b) the report of the Board,
do not comply with the provisions of section 129 or section 134 they may prepare revised
financial statement or a revised report in respect of any of the three preceding financial years
after obtaining approval of the Tribunal on an application made by the company in such form
and manner as may be prescribed and a copy of the order passed by the Tribunal shall be
filed with the Registrar:
Provided that the Tribunal shall give notice to the Central Government and the Incometax
authorities and shall take into consideration the representations, if any, made by that
Government or the authorities before passing any order under this section:
Provided further that such revised financial statement or report shall not be prepared
or filed more than once in a financial year:
Provided also that the detailed reasons for revision of such financial statement or
report shall also be disclosed in the Board's report in the relevant financial year in which
such revision is being made.
(2) Where copies of the previous financial statement or report have been sent out to
members or delivered to the Registrar or laid before the company in general meeting, the
revisions must be confined to—
(a) the correction in respect of which the previous financial statement or report
do not comply with the provisions of section 129 or section 134; and
(b) the making of any necessary consequential alternation.
(3) The Central Government may make rules as to the application of the provisions of
this Act in relation to revised financial statement or a revised director's report and such rules
may, in particular—
(a) make different provisions according to which the previous financial
statement or report are replaced or are supplemented by a document indicating the
corrections to be made;
(b) make provisions with respect to the functions of the company's auditor in
relation to the revised financial statement or report;
(c) require the directors to take such steps as may be prescribed.
 
 
 
132.Constitution of National Financial Reporting Authority.

(1) The Central Government may, by notification, constitute a National Financial
Reporting Authority to provide for matters relating to accounting and auditing standards
under this Act.
(2) Notwithstanding anything contained in any other law for the time being in force,
the National Financial Reporting Authority shall—
(a) make recommendations to the Central Government on the formulation and
laying down of accounting and auditing policies and standards for adoption by
companies or class of companies or their auditors, as the case may be;
(b) monitor and enforce the compliance with accounting standards and auditing
standards in such manner as may be prescribed;
(c) oversee the quality of service of the professions associated with ensuring
compliance with such standards, and suggest measures required for improvement in
quality of service and such other related matters as may be prescribed; and
(d) perform such other functions relating to clauses (a), (b) and (c) as may be
prescribed.
(3) The National Financial Reporting Authority shall consist of a chairperson, who
shall be a person of eminence and having expertise in accountancy, auditing, finance or law
to be appointed by the Central Government and such other members not exceeding fifteen
consisting of part-time and full-time members as may be prescribed:
Provided that the terms and conditions and the manner of appointment of the
chairperson and members shall be such as may be prescribed:
Provided further that the chairperson and members shall make a declaration to the
Central Government in the prescribed form regarding no conflict of interest or lack of
independence in respect of his or their appointment:
Provided also that the chairperson and members, who are in full-time employment with
National Financial Reporting Authority shall not be associated with any audit firm (including
related consultancy firms) during the course of their appointment and two years after ceasing
to hold such appointment.
(4) Notwithstanding anything contained in any other law for the time being in force,
the National Financial Reporting Authority shall—
(a) have the power to investigate, either suo motu or on a reference made to it by
the Central Government, for such class of bodies corporate or persons, in such manner
as may be prescribed into the matters of professional or other misconduct committed
by any member or firm of chartered accountants, registered under the Chartered
Accountants Act, 1949:
Provided that no other institute or body shall initiate or continue any proceedings
in such matters of misconduct where the National Financial Reporting Authority has
initiated an investigation under this section;
(b) have the same powers as are vested in a civil court under the Code of Civil
Procedure, 1908, while trying a suit, in respect of the following matters, namely:—
(i) discovery and production of books of account and other documents, at
such place and at such time as may be specified by the National Financial
Reporting Authority;
(ii) summoning and enforcing the attendance of persons and examining
them on oath;
(iii) inspection of any books, registers and other documents of any person
referred to in clause (b) at any place;
(iv) issuing commissions for examination of witnesses or documents;
(c) where professional or other misconduct is proved, have the power to make
order for—
(A) imposing penalty of—
(I) not less than one lakh rupees, but which may extend to five times
of the fees received, in case of individuals; and
(II) not less than ten lakh rupees, but which may extend to ten times
of the fees received, in case of firms;
(B) debarring the member or the firm from engaging himself or itself from
practice as member of the Institute of Chartered Accountant of India referred to
in clause (e) of sub-section (1) of section 2 of the Chartered Accountants Act,
1949 for a minimum period of six months or for such higher period not exceeding
ten years as may be decided by the National Financial Reporting Authority.
Explanation.—For the purposes of his sub-section, the expression "professional or
other misconduct" shall have the same meaning assigned to it under section 22 of the
Chartered Accountants Act, 1949.
(5) Any person aggrieved by any order of the National Financial Reporting Authority
issued under clause (c) of sub-section (4), may prefer an appeal before the Appellate Authority
constituted under sub-section (6) in such manner as may be prescribed.
(6) The Central Government may, by notification, constitute, with effect from such date
as may be specified therein, an Appellate Authority consisting of a chairperson and not more
then two other members, to be appointed by the Central Government, for hearing appeals
arising out of the orders of the National Financial Reporting Authority.
(7) The qualifications for appointment of the chairperson and members of the Appellate
Authority, the manner of selection, the terms and conditions of their service and the
requirement of the supporting staff and procedure (including places of hearing the appeals,
form and manner in which the appeals shall be filed) to be followed by the Appellate Authority
shall be such as may be prescribed.
(8) The fee for filing the appeal shall be such as may be prescribed.
(9) The officer authorised by the Appellate Authority shall prepare in such form and at
such time as may be prescribed its annual report giving a full account of its activities and
forward a copy thereof to the Central Government and the Central Government shall cause
the annual report to be laid before each House of Parliament.
(10) The National Financial Reporting Authority shall meet at such times and places
and shall observe such rules of procedure in regard to the transaction of business at its
meetings in such manner as may be prescribed.
(11) The Central Government may appoint a secretary and such other employees as it
may consider necessary for the efficient performance of functions by the National Financial
Reporting Authority under this Act and the terms and conditions of service of the secretary
and employees shall be such as may be prescribed.
(12) The head office of the National Financial Reporting Authority shall be at New Delhi
and the National Financial Reporting Authority may, meet at such other places in India as it deems
fit.
(13) The National Financial Reporting Authority shall cause to be maintained such
books of account and other books in relation to its accounts in such form and in such manner
as the Central Government may, in consultation with the Comptroller and Auditor-General of
India prescribe.
(14) The accounts of the National Financial Reporting Authority shall be audited by
the Comptroller and Auditor-General of India at such intervals as may be specified by him
and such accounts as certified by the Comptroller and Auditor-General of India together with
the audit report thereon shall be forwarded annually to the Central Government by the
National Financial Reporting Authority.
(15) The National Financial Reporting Authority shall prepare in such form and at
such time for each financial year as may be prescribed its annual report giving a full account
of its activities during the financial year and forward a copy thereof to the Central Government
and the Central Government shall cause the annual report and the audit report given by the
Comptroller and Auditor-General of India to be laid before each House of Parliament.
 
 
 
133.Financial statement, Board’s report, etc.

The Central Government may prescribe the standards of accounting or any
addendum thereto, as recommended by the Institute of Chartered Accountants of India,
constituted under section 3 of the Chartered Accountants Act, 1949, in consultation with
and after examination of the recommendations made by the National Financial Reporting
Authority.
 
 
 
134. Central Government to prescribe accounting standards.

(1) The financial statement, including consolidated financial statement, if any,
shall be approved by the Board of Directors before they are signed on behalf of the Board at
least by the chairperson of the company where he is authorised by the Board or by two
directors out of which one shall be managing director and the Chief Executive Officer, if he is
a director in the company, the Chief Financial Officer and the company secretary of the
company, wherever they are appointed, or in the case of a One Person Company, only by one
director, for submission to the auditor for his report thereon.
(2) The auditors’ report shall be attached to every financial statement.
(3) There shall be attached to statements laid before a company in general meeting, a
report by its Board of Directors, which shall include—
(a) the extract of the annual return as provided under sub-section (3) of section 92;
(b) number of meetings of the Board;
(c) Directors’ Responsibility Statement;
(d) a statement on declaration given by independent directors under sub-section
(6) of section 149;
(e) in case of a company covered under sub-section (1) of section 178, company’s
policy on directors’ appointment and remuneration including criteria for determining
qualifications, positive attributes, independence of a director and other matters
provided under sub-section (3) of section 178;
(f) explanations or comments by the Board on every qualification, reservation or
adverse remark or disclaimer made—
(i) by the auditor in his report; and
(ii) by the company secretary in practice in his secretarial audit report;
(g) particulars of loans, guarantees or investments under section 186;
(h) particulars of contracts or arrangements with related parties referred to in
sub-section (1) of section 188 in the prescribed form;
(i) the state of the company’s affairs;
(j) the amounts, if any, which it proposes to carry to any reserves;
(k) the amount, if any, which it recommends should be paid by way of dividend;
(l) material changes and commitments, if any, affecting the financial position of
the company which have occurred between the end of the financial year of the company
to which the financial statements relate and the date of the report;
(m) the conservation of energy, technology absorption, foreign exchange
earnings and outgo, in such manner as may be prescribed;
(n) a statement indicating development and implementation of a risk management
policy for the company including identification therein of elements of risk, if any,
which in the opinion of the Board may threaten the existence of the company;
(o) the details about the policy developed and implemented by the company on
corporate social responsibility initiatives taken during the year;
(p) in case of a listed company and every other public company having such
paid-up share capital as may be prescribed, a statement indicating the manner in which
formal annual evaluation has been made by the Board of its own performance and that
of its committees and individual directors;
(q) such other matters as may be prescribed.
(4) The report of the Board of Directors to be attached to the financial statement under
this section shall, in case of a One Person Company, mean a report containing explanations
or comments by the Board on every qualification, reservation or adverse remark or disclaimer
made by the auditor in his report.
(5) The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) shall
state that—
(a) in the preparation of the annual accounts, the applicable accounting standards
had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the company at the end of the
financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for
safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors, in the case of a listed company, had laid down internal financial
controls to be followed by the company and that such internal financial controls are
adequate and were operating effectively.
Explanation.—For the purposes of this clause, the term “internal financial
controls” means the policies and procedures adopted by the company for ensuring
the orderly and efficient conduct of its business, including adherence to company’s
policies, the safeguarding of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information;
(f) the directors had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
(6) The Board’s report and any annexures thereto under sub-section (3) shall be
signed by its chairperson of the company if he is authorised by the Board and where he is not
so authorised, shall be signed by at least two directors, one of whom shall be a managing
director, or by the director where there is one director.
(7) A signed copy of every financial statement, including consolidated financial
statement, if any, shall be issued, circulated or published along with a copy each of—
(a) any notes annexed to or forming part of such financial statement;
(b) the auditor’s report; and
(c) the Board’s report referred to in sub-section (3).
(8) If a company contravenes the provisions of this section, the company shall be
punishable with fine which shall not be less than fifty thousand rupees but which may
extend to twenty-five lakh rupees and every officer of the company who is in default shall be
punishable with imprisonment for a term which may extend to three years or with fine which
shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with
both.
 
 
 
135.Right of member to copies of audited financial statement.

(1) Every company having net worth of rupees five hundred crore or more, or
turnover of rupees one thousand crore or more or a net profit of rupees five crore or more
during any financial year shall constitute a Corporate Social Responsibility Committee of the
Board consisting of three or more directors, out of which at least one director shall be an
independent director.
(2) The Board's report under sub-section (3) of section 134 shall disclose the
composition of the Corporate Social Responsibility Committee.
(3) The Corporate Social Responsibility Committee shall,—
(a) formulate and recommend to the Board, a Corporate Social Responsibility
Policy which shall indicate the activities to be undertaken by the company as
specified in Schedule VII;
(b) recommend the amount of expenditure to be incurred on the activities referred
to in clause (a); and
(c) monitor the Corporate Social Responsibility Policy of the company from time
to time.
(4) The Board of every company referred to in sub-section (1) shall,—
(a) after taking into account the recommendations made by the Corporate Social
Responsibility Committee, approve the Corporate Social Responsibility Policy for the
company and disclose contents of such Policy in its report and also place it on the
company's website, if any, in such manner as may be prescribed; and
(b) ensure that the activities as are included in Corporate Social Responsibility
Policy of the company are undertaken by the company.
(5) The Board of every company referred to in sub-section (1), shall ensure that the
company spends, in every financial year, at least two per cent. of the average net profits of
the company made during the three immediately preceding financial years, in pursuance of
its Corporate Social Responsibility Policy:
Provided that the company shall give preference to the local area and areas around it
where it operates, for spending the amount earmarked for Corporate Social Responsibility
activities:
Provided further that if the company fails to spend such amount, the Board shall, in its
report made under clause (o) of sub-section (3) of section 134, specify the reasons for not
spending the amount.
Explanation.—For the purposes of this section “average net profit” shall be calculated
in accordance with the provisions of section 198.
 
 
 
136.Corporate Social Responsibility.

(1) Without prejudice to the provisions of section 101, a copy of the financial
statements, including consolidated financial statements, if any, auditor’s report and every
other document required by law to be annexed or attached to the financial statements,
which are to be laid before a company in its general meeting, shall be sent to every member
of the company, to every trustee for the debenture-holder of any debentures issued by the
company, and to all persons other than such member or trustee, being the person so
entitled, not less than twenty-one days before the date of the meeting:
Provided that in the case of a listed company, the provisions of this sub-section shall
be deemed to be complied with, if the copies of the documents are made available for inspection
at its registered office during working hours for a period of twenty-one days before the date
of the meeting and a statement containing the salient features of such documents in the
prescribed form or copies of the documents, as the company may deem fit, is sent to every
member of the company and to every trustee for the holders of any debentures issued by the
company not less than twenty-one days before the date of the meeting unless the shareholders
ask for full financial statements:
Provided further that the Central Government may prescribe the manner of circulation of
financial statements of companies having such net worth and turnover as may be prescribed:
Provided also that a listed company shall also place its financial statements including
consolidated financial statements, if any, and all other documents required to be attached
thereto, on its website, which is maintained by or on behalf of the company:
Provided also that every company having a subsidiary or subsidiaries shall,—
(a) place separate audited accounts in respect of each of its subsidiary on its
website, if any;
(b) provide a copy of separate audited financial statements in respect of each of
its subsidiary, to any shareholder of the company who asks for it.
(2) A company shall allow every member or trustee of the holder of any debentures
issued by the company to inspect the documents stated under sub-section (1) at its registered
office during business hours.
(3) If any default is made in complying with the provisions of this section, the company
shall be liable to a penalty of twenty-five thousand rupees and every officer of the company
who is in default shall be liable to a penalty of five thousand rupees.
 
 
 
137.Copy of financial statement to be filed with Registrar.

(1) A copy of the financial statements, including consolidated financial statement, if
any, along with all the documents which are required to be or attached to such financial
statements under this Act, duly adopted at the annual general meeting of the company, shall be
filed with the Registrar within thirty days of the date of annual general meeting in such
manner, with such fees or additional fees as may be prescribed within the time specified under
section 403:
Provided that where the financial statements under sub-section (1) are not adopted at
annual general meeting or adjourned annual general meeting, such unadopted financial
statements along with the required documents under sub-section (1) shall be filed with the
Registrar within thirty days of the date of annual general meeting and the Registrar shall take
them in his records as provisional till the financial statements are filed with him after their
adoption in the adjourned annual general meeting for that purpose:
Provided further that financial statements adopted in the adjourned annual general
meeting shall be filed with the Registrar within thirty days of the date of such adjourned
annual general meeting with such fees or such additional fees as may be prescribed within
the time specified under section 403:
Provided also that a One Person Company shall file a copy of the financial statements duly
adopted by its member, along with all the documents which are required to be attached to such
financial statements, within one hundred eighty days from the closure of the financial year:
Provided also that a company shall, along with its financial statements to be filed with
the Registrar, attach the accounts of its subsidiary or subsidiaries which have been
incorporated outside India and which have not established their place of business in India.
(2) Where the annual general meeting of a company for any year has not been held, the
financial statements along with the documents required to be attached under sub-section
(1), duly signed along with the statement of facts and reasons for not holding the annual
general meeting shall be filed with the Registrar within thirty days of the last date before
which the annual general meeting should have been held and in such manner, with such fees
or additional fees as may be prescribed within the time specified, under section 403.
(3) If a company fails to file the copy of the financial statements under sub-section (1)
or sub-section (2), as the case may be, before the expiry of the period specified in section 403,
the company shall be punishable with fine of one thousand rupees for every day during
which the failure continues but which shall not be more than ten lakh rupees, and the
managing director and the Chief Financial Officer of the company, if any, and, in the absence
of the managing director and the Chief Financial Officer, any other director who is charged by
the Board with the responsibility of complying with the provisions of this section, and, in the
absence of any such director, all the directors of the company, shall be punishable with
imprisonment for a term which may extend to six months or with fine which shall not be less
than one lakh rupees but which may extend to five lakh rupees, or with both.
 
 
 
138.Internal audit.

(1) Such class or classes of companies as may be prescribed shall be required to
appoint an internal auditor, who shall either be a chartered accountant or a cost accountant,
or such other professional as may be decided by the Board to conduct internal audit of the
functions and activities of the company.
(2) The Central Government may, by rules, prescribe the manner and the intervals in
which the internal audit shall be conducted and reported to the Board.
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