Books of Accounts Maintained by a Foreign Company

Books of Accounts to be Maintained by a Foreign Company
According to Section 600 (3) (b) of the Companies Act, the provisions of Sections 209 and 209-A are applicable to the Indian business of a foreign company having an established place of business in India, as they apply to a company incorporated in India. Therefore, foreign companies are required to maintain books of accounts only with reference to their Indian business under the Companies Act.
According to Section 209 (1), the foreign company is required to maintain proper
books of account with respect to:
(a) all sums of money received and expended by the company and the matters in
respect of which the receipt and expenditure take place;
(b) all sales and purchases of goods by the company;
(c) the assets and liabilities of the company; and
(d) in the case of a company pertaining to any class of companies engaged in
production, processg, manufacturing or mining activities, such particulars relating to utilisation of material or labour or to other items of cost as may be prescribed, if such class of companies is required by the Central Government to include such particulars in the books of accounts.
Proper books of accounts shall not be deemed to have been kept with respect to
the matters specified above:
(a) if there are not kept such books as are necessary to give a true and fair view
of the state of affairs of the company or branch office, as the case may be, and
to explain the transactions; and
(b) if such books are not kept on accrual basis and according to the double entry
system of account41g.
As already stated, these books of accounts are required to be maintained with
reference to the Indhm business of the for.eign company.
The books of accounts are required to be maintained at the principal place of
business in India [Section 600 (3) (a)].
The books of accounts of a foreign company relating to its Indian business, may
be inspected by the following persons:
(a) any director of the company’during business hours [Section 209 (4)];
(b) the Registrar; and
(c) the government officer authorised by the Central Government under Section
209 A (1); and
(d) such officers of SEBI as may be authorised by it.
. Comment: (i) A non-member for whom the company has accepted deposits, asks for a copy of the latest Balance Sheet of the Company; and