State of affairs of the company

Maintenance of Books of Account
Section 209 of the Companies Act requires every company to maintain at its registered
office, 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 took 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 companies engaged in production, processing, manufacturing
or mining activities, such particulars relating to the utilisation of material or labour or to other items of cost as may be prescribed, if such companies are required by the Central Government to include such particulars in the books of account.
As to what shall constitute proper books of account, sub-section (3) of Section 209 (as per 1988 amendment) provides that proper books of account shall not be deemed to be kepf by a company:
(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 the branch office and to explain its transactions; and
(b) if such books are not kept on accrual basis and according to the double entry
system of accounting.
Place of Keeping. The books of accounts of a company must be kept at the registered office or at such other place in India as the Board may decide. In case the Board decides to keep the books of accounts at some other place, the company must file a notice in writing with the Registrar within 7 days of the decision, giving the full address of that other place. If a company has branch offices, proper books of accounts must be kept separately at such offices and proper summarised returns of the accounts must be sent at intervals of not more than 3 months, to the registered office or the other place where books of account of the head office are kept [Sec. 209 (2)].
Inspection
Section 209 requires that the books of account and other books and papers of every
company shall be open to inspection during business hours:
(i) by the Registrar; or
(ii) by such officer of Government as may be authorised by the Central Govern
ment in this behalf.
The aforesaid inspection may be made without giving any previous notice to the
company or any officer thereof.
The person making the inspection under this Section may, during the course of inspection:
(i)make or cause to be made copies of books of account and other books and
papers; or
(ii)place or cause to be placed any marks of identification thereon, in token of the
inspection having been made.
Any person making an inspection under this Section shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure while trying a suit, in respect of the following matters:
(i)the discovery and production of books of account and other documents at
such place and such time as may be specified by such person;
(ii) summoning and enforcing the attendance of persons and examining them on
oath; and
(iii) inspection of any books, registers and other documents of the company at any
place [Sub-sec. (5)].