Appendix 6

TEXT OF THE FORMS PRESCRIBED UNDER THE COMPANIES (BRANCH AUDIT EXEMPTION) RULES, 1961

Form of application for exemption of a branch office from audit

1. (a) Name of company _______________

(b) Registration number of company _______________

2. Full description of the activities in which engaged (e.g. goods produced, articles manufactured or processed, services rendered, as the case may be).

3. Situation of all the branch offices of the company and the nature of activities carried on at each of them, indicating separately the branch office(s) in respect of which exemption from audit is desired:

Note.‑ Where the applicant company is a banking company, it shall also furnish the following particulars:

(a) the situation of those branch offices which are to be compulsorily audited by the company's statutory auditor(s) appointed under section 224 or by the branch auditor(s) appointed under section 228(7) during the financial year(s) to which the application relates;

(b) the situation of the branch offices, other than those included under (a) above which were audited by the company's statutory auditor(s) appointed under section 224 or by the branch auditor(s) appointed under section 228(3) during the financial year immediately preceding the financial year(s) to which the application relates; and

(c) the situation of the branch offices, other than those included at (a) above, which are proposed to be audited by the company's statutory auditor(s) appointed under section 224 or by the branch auditor(s) appointed under section 228(3) during the financial year(s) to which the application relates.

4. Financial year or years in respect of which exemption is desired.

5. Date of the general meetings at which the proposal to apply for exemption was approved (copy of the resolution and the explanatory note under section 173(2) of the Act to be attached).

6. (Reasons for) / (Grounds on) which exemption is asked for.

(a) Where the applicant company is not a banking company, the value of the total turnover of the company including earnings from services rendered and/or from any other sources for each of the last three financial years (copy of the latest audited balance‑sheet and‑profit and loss account of the company to be attached).

(b) Where the applicant company is a banking company, the total amount of outstanding deposits (including time‑deposits) of the company as at the last date of each of the last three financial years (a copy each of the audited balance‑sheet and profit and loss account of the company for the last three financial years to be attached).

Note.‑No copy or copies of the audited balance‑sheet(s) and profit and loss account(s) need be attached if a copy thereof has already been submitted to the Department of Company Law Administration, New Delhi, in any other connection; but the number and date of the communication with which it has been so submitted should be quoted; and

(a) Where the applicant company is not a banking company, a statement showing separately the following particulars in respect of each of the branch offices for which exemption from audit is desired for each of the last three financial years:

(i) the value of the goods or articles produced, manufactured or processed at each branch office;

(ii) the value of the goods or articles sold and of services rendered at each branch office;

(iii) the amount of expenditure of a revenue nature incurred by each branch office;

(iv) the amount of expenditure of a capital nature incurred by each branch office.

(b) Where the applicant company is a banking company a statement showing separately the total amount of outstanding advances (including bills purchased and discounted) of each of branch offices as at the last date of each of the last three financial years.

9. If the application is for exemption under clause (a) of sub‑ rule (1) of rule (4), the details of the arrangements made for the regular and periodical scrutiny of the accounts of branch offices and the name, qualification and experience of the person appointed to conduct such scrutiny.

10. Whether audit of the accounts of the branch offices is at present carried out by the auditor of the company; if not, the existing arrangements, if any, for the audit of each of the branch offices should be fully explained.

11. Amounts paid as remuneration to each of the auditors including auditors of branch offices during the last financial year.

12. Whether the company has made or proposes to make arrangements for the audit of branch office or offices for which exemption is asked for by a person otherwise qualified for appointments as branch auditor even though such person may be an officer or employee of the company.

13. If the reply to item 12 is in the affirmative, the following details to be stated

(a) Name of the qualified accountant concerned.

(b) Designation.

(d) Year of qualification.

(e) Previous experience, whether as a practising accountant or as an employee (along with the name of the employer and the period served).

14. A certificate from the company as required under clause (a) of sub‑rule (2) of rule 5 together with a written statement from the auditor of the company as required under clause (b) of sub‑rule (2) of that rule.

15. If the application is made on the ground that no auditor is available at reasonable cost for the audit of the accounts of any branch or branches, a statement showing the names of the auditors who had been requested to undertake the audit of the branch or branches and the fees quoted by them to be attached.

16. Any other relevant details.

Managing Director or any other officer

duly authorised by the Board.

Source: (Gazette of India (Extraordinary), Part II, section 3, dated 13th January, 1961)

Note that "every application for exemption should be accompanied by all the relevant documents specified in the Rules and in the Annexure thereto, stating specifically under which of the clause (a), (b), (c) or (d) of sub‑rule (1) of rule 4 exemption is sought. Against item 3 of the application

Form the branch offices in respect of which exemption from audit is sought and branch offices which are exempted from audit in terms of rule 3 of the Rules should be separately indicated". (Departmental Guide to Applications to the Central Government, p. 178).

Guidelines for filling the form :

1. Refer to section 228 of the Companies Act, 1956 and Companies (Branch Audit Exemption) Rules, 1961.

2. The clauses (a), (b), (c) and (d) of sub‑rule (1) of Rule 4 of the Rules under which exemption is required should be stated specifically.

3. The branch offices in respect of which exemption is sought and the branch offices which are exempted from audit in terms of rule 3 should be separately indicated against item 3 of the application.

4. The following documents should be annexed:

(i) A certified true copy of the Special Resolution and Explanatory Statement under section 173(2) of the Act.

(ii) A certified true copy each of the audited balance sheet and profit and loss account of the company for the latest year and the last three financial years.

(iii) A statement showing the following in respect of each of the branch for which exemption is sought:

(a) value of goods produced.

(b) value of goods sold or service rendered.

(d) the amount of expenditure of capital nature incurred.

(iv) If the exemption is sought on the ground mentioned in clause (b) of Rule 4(1) of the rules, the following certificate should be annexed:

(a) A certificate signed by the manager or managing director of the company stating that proper arrangements have been made for the audit of accounts of the branch office in accordance with rule 4(1)(b).

(b) A certificate from the auditors of the company stating that arrangements made for such audit are adequate and that they will show a true and fair view of the working of the branch office.

(v) Document evidencing payment of fee that is demand draft or treasury challan.

5. The requisite fee should be paid. For appropriate fee refer to Companies (Fees on Applications) Rules, 1999 given in Appendix 96.

6. For the text of the Specimen filled up Form, refer BHANDARI'S GUIDE TO COMPANY LAW PROCEDURES Vol. 3.

7. For Specimen Drafts of Company Precedents, Agreements, Deeds and Documentations, see BHANDARI'S GUIDE TO COMPANY LAW PROCEDURES, Vol. 4, (17th Edn., 2002).