Provision Requiring Attention of Auditors

Section under Companies Act, 1956	Section under Companies Act, 2013	*Description of Matter*
2(14A)	2(35)	Dividend includes any interim dividend
2(29A)	2(57)	Net worth means total of paid-up capital and free reserves after deducting provisions or expenses as may be prescribed.
	2(43)	Free reserves include reserves out of the profits and share premium account but does not include revaluation and amalgamation reserves.
2(46AA)	—	Sick industrial company means an industrial company a. Which has accumulated losses in any financial year which is 50% or more than the average net worth during 4 years immediately preceding such financial year or b. Which has failed to repay its debts within any 3 consecutive quarters to its creditors who made demand in writing for the repayment of the same.
3(6)	2(68) & 2(71)	Provisions of minimum paid-up capital not to apply to companies registered under section 8.
4	2(46) & 2(87)	Meaning of holding company and subsidiary.
4A	2(72)	Public Financial Institutions.
13, 16 to 18	4, 13 & 12	Memorandum and its alterations; change of registered office within State to be confirmed by Regional Director and special resolution to be passed, special resolution and confirmation by the Tribunal required for change of registered office to another State; special resolution for alteration of objects clause; registration of alteration within 3 months.
31	14	Alteration of Articles by special resolution.
42	19	Subsidiary not to be a member of its holding Co.
43A		Deemed public company to shed its status and become a private company.
49	187	Investments of company to be held in its own name.
58A	2(31), 73, 74, 76	Regulation of deposits from Public (also refer rules under this section).
58AA	—	Regulations in case of defaults in repayments of deposit, or payment of interest to small depositors.
61	27	Terms of contract mentioned in prospectus or statement in lieu of prospectus not to be varied.
67	42	Private issues to be treated as Public Issue if the offer is to 50 persons or more.
68B	29	IPO of listed company of ₹ 10 crores or more to be in dematerialised form.
69	39	Prohibition of allotment unless minimum subscription received.
70	—	Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to Registrar.
71	—	Effect of irregular allotment.
72	—	Application for and allotment of shares and debentures.
73	40	Allotment of shares and debentures to be dealt in on Stock Exchange.
74	—	Manner of reckoning fifth, eighth and tenth days in Sec. 72 and 73.
75	39	Return as to allotments — issue of shares for consideration other than cash.
76	40	Power to pay certain commissions and prohibition of payment of all other commissions, discounts, etc.
77	67	Restrictions on purchase by company or loans by company for purchase of its own or holding company’s shares.
77A/77AA/77B	68, 69, 70	Purchase by a company of its shares or other specified securities, compliance with conditions in relation thereto and provision for transfer of certain sums to capital redemption reserve account.
78	52	Applications of premiums received on issue of shares.
79	53	Power to issue shares at a discount.
80	55	Power to issue redeemable preference shares.
80A	—	Redemption of irredeemable preference shares, etc.
81	62	Further issue of capital.
86	43	Equity share capital with differential rights.
93	51	Payment of dividend in proportion to amount paid-up.
94	61	Power of limited company to alter share capital.
94A	62, 64	Share capital to stand increased when order is made u/s. 81(4).
95	64	Notice to registrar of consolidation of share capital, conversion of shares into stock, etc.
96	—	Effect of conversion of shares into stock.
97	64	Notice of increase of share capital to members.
100 & 102	66	Special resolution for reduction of share capital and order for confirming such reduction and powers of the court on making such order.
108	56	Normal formalities for transfer of shares or debentures.
117A, 117B	71	Debenture trust deed, appointment of debenture.
& 117C	71	Trustees and creation of Debenture Redemption Reserve.
143	85	Company’s register of charges.
149	11	Restrictions on commencement of business.
165	—	Statutory meeting and statutory report.
166	96	Annual general meeting.
189	114	Ordinary and special resolutions.
190	115	Special Notice.
192	117	Registration of certain resolutions and agreements.
192A	2(65)	Passing of resolution by postal ballot.
193	118	Minutes of proceedings of general meetings and Board and other meetings.
197	118	A company not to appoint or employ certain different categories of managerial personnel at the same time.
198	197	Overall maximum managerial remuneration and managerial remuneration in case of absence or in adequacy of profits (also refer Sec. 309, 349, 350, Schedules XIII and XIV).
199	—	Calculation of commission, etc. in certain cases.
200	—	Prohibition of tax-free payments.
204	—	Restriction on appointment of firm or body corporate to office or place of profit under a company.
205	123	Dividend to be paid only out of profits after charging depreciation and transfer to reserves. Dividend declared by a Company to be transferred to a separate Bank account within 5 days.
205A	123	Unpaid dividend to be transferred initially to a special bank account and thereafter after 7 years to the Investor Education & Protection Fund set up by the Central Government.
205A(3)	124	Conditions for declaration of dividend out of reserves.
205B	124	Payment of unpaid or unclaimed dividend.
206A	126	Right to dividend, rights shares and bonus shares to be held in abeyance pending registration of transfer of shares.
207	127	Dividend declared by company normally to be paid within 30 days.
208	—	Power of company to pay interest out of capital in certain cases.
209	2(13)	Books of account to be kept by company—including cost records.
209(3)	128	Books of account to be kept on accrual basis and according to the double entry system of book-keeping.
209A	207 & 208	Inspection of books of account, etc. of companies by Central Government and SEBI.
210	129	Annual accounts and Balance Sheet.
210A	132	Constitution of National Advisory Committee for Consultation by Government on Accounting Standards.
211	2(2), 129, 133	Form and contents of balance sheet and profit and loss account and requirements for complying with Accounting Standards.
212	—	Balance sheet of holding company to include certain particulars as to its subsidiaries.
213	—	Financial year of holding company and subsidiary.
215	134	Authentication of balance sheet and profit and loss account.
216	134	Profit and loss account to be annexed, and Auditor’s Report to be attached, to balance sheet.
217	134	Board’s report. It will also include a Directors' responsibility statement.
220	137	Copies of approved annual accounts to be filed with registrar.
222	—	Construction of references to documents annexed to accounts.
*224	139 & 142	Appointment and remuneration of auditors.
224A	—	Auditor not to be appointed except with approval of the company by special resolution in certain cases (also refer S. 619B).
225	140	Provisions as to resolutions for appointing or removing auditors.
226	141	Qualifications and disqualifications of auditors.
227	143	Powers and duties of auditors.
227(1A)	—	Inquiry and report to share holders as regards specified clauses.
227(4A)	—	Manufacturing and Other Companies (Auditor’s Report) Order, 1988.
228	143	Audit of accounts of branch office of a company.
229	145	Signature of audit report, etc.
230	145	Auditor’s report to be read out in general meeting.
231	146	Auditor’s right to receive communication relating to, and to attend and to speak at, company’s general meeting.
233A	—	Power of Central Government to direct special audit in certain cases.
233B	148	Cost audit.
235	210	Investigation of the affairs of a company.
252	2(10), 149, 151	Minimum number of directors.
259	—	Increase in number of directors to require Government sanction.
260	161	Additional directors.
268	—	Amendment of provision relating to managing, whole time or non-rotational director's appointment to require Government approval.
269	2(94), 203	Appointment or reappointment of managing or whole time director to require Government approval in certain cases and every public company or a private company which is a subsidiary of a public company to have a managing or wholetime director or manager if the paid-up share capital is ₹ 5 crores. (₹ 1 crore up to 17-9-1990)
274	164	Disqualification of directors.
275	165	Maximum 15 companies in which a person can be a director.
291	179	General powers of the Board.
292	179	Certain powers to be exercised by Board only at meeting.
292A	177	Formation of Audit Committee by public company having paid-up capital of not less than ₹ 5 crores.
293	180, 181	Restrictions on powers of Board and necessity of general meeting consent.
293A	182	Prohibitions and restrictions regarding political contributions.
293B	183	Power of Board or others to make contributions to the National Defence Fund, etc.
294	188	Appointment of sole selling agents to require approval of company in general meeting.
294A	188	Prohibition of payment of compensation to sole selling agents for loss of office in certain cases.
294AA	—	Power of Central Government to prohibit the appointment of sole selling agents in certain cases.
295	185	Central Government’s approval required for loans to directors and specified associates.
296	185	Application of S. 295 to book debts in certain cases.
297	188	Board’s sanction and in some cases Central Government’s approval to be required for certain contracts in which particular directors are interested.
299	184	Disclosure of interest by director.
300	2(49)	Interested director not to participate, vote or constitute quorum in board’s proceedings.
301	189	Register of contracts, companies and firms in which directors are interested.
309	197	Remuneration of directors (also refer Sec. 198, 349, 350, Schedules XIII and XIV).
310	197	Provision for increase in remuneration to require Government sanction.
311	—	Increase in remuneration of managing director on reappointment or appointment to require Government sanction.
312	166	Prohibition of assignment of office by director.
313	161	Appointment and term of office of alternate director.
314	188	Special resolution (and in some cases Government approval) required for director, etc. to hold office or place of profit.
317	196	Managing Director not to be appointed for more than 5 years at a time.
318	191	Compensation for loss of office not permissible except to managing or whole time directors or directors who are managers.
319	191	Payment to director, etc. for loss of office, etc. in connection with transfer of undertaking or property.
320	191	Payment to director for loss of office, etc. in connection with transfer of shares.
321	191	Provisions supplementary to Sec. 318, 319, 320.
349	198	Determination of net profits (also refer Sec. 198, 309, 350, Schedules XIII and XIV).
350	—	Ascertainment of depreciation (also refer Sec. 198, 309, 349, Schedules XIII and XIV).
370	—	Loans, etc. to companies to be subject to specified limits and consents. (up to 30-10-1998)
372	—	Investment in shares, etc. of other companies to be subject to specified limits and consents. (up to 30-10-1998)
372A	2(43)	Loans/Guarantees to and investments in other companies to be subject to specified limits and consents (w.e.f. 31-10-1998).
383A	—	Certain companies to have a whole time secretary and certain companies to file a certificate from a Secretary in whole time practice regarding compliance with the provisions of the Act.
384, 385,	196	Appointment of MD, WTD or Manager
386	203	Firm or body corporate not to be appointed as manager, disqualifications of manager, etc.
387	197	Remuneration of manager.
388	166	Application of Sec 269, 310, 312 & 317 to managers.
417	—	Employees' securities to be deposited in post office savings bank or scheduled banks or State Bank of India.
418	—	Provisions applicable to Provident Funds of employees.
424A – 424G	253, 261, 262, 265	Revival and Rehabilitation of Sick Industrial Companies – Reference to Tribunal, Inquiry into working of such companies, Tribunal to make suitable order on completion of inquiry, Preparation and sanction of scheme, Rehabilitation, Arrangement for continuing operations, etc. during inquiry and Winding up of sick industrial company.
581A - 581ZT	465	Producer Companies – Formation, Management, Share Capital and Members rights, Functioning, etc. of such companies. (Part IXA).
591	2(42), 379	Certain foreign companies to comply with provisions as Indian companies.
594	381	Accounts of foreign companies.
605A	390	Offer of Indian Depository Receipts.
619, 619B	139, 143	Application of Sec. 224 to 233B to Government companies.