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TMI BlogSubstitution of section 25.X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of a company under section 141 of the Companies Act. (2) The Corporation shall not appoint an auditor for more than one term of five consecutive years: Provided that an auditor who has completed the term of appointment shall not be eligible for re-appointment or for fresh appointment as auditor for a period of five years from such completion: Provided further that no audit firm shall be appointed as auditor for a period of five years which, if appointed, as on the date of its appointment, would have a common partner or partners with the audit firm whose term as auditor in the Corporation had expired in the financial year immediately preceding the financial year in which fresh appointment is to be made, or which is associated with the same network of audit firms as the audit firm whose term had expired as aforesaid: Provided also that nothing contained in this sub-section shall prejudice the right of the Corporation to remove an auditor or the right of the auditor to resign from such office of the Corporation. Explanation .-For the purposes of this sub-section, the expression same network includes firms operating or functioning under a common brand name or trade name, or under c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or or the right of the auditor to resign from such office of the Corporation. (10) An auditor appointed under sub-section (1) or subsection (8) or sub-section (9) shall provide to the Corporation or its subsidiaries such other services as are approved by the Board, but shall not include any of the services, whether rendered directly or indirectly, that are enumerated in section 144 of the Companies Act: Provided that an auditor who has been performing any non-audit services on or before the coming into force of section 128 of the Finance Act, 2021 shall comply with the provisions of this sub-section before the close of the first financial year in which the said section comes into force. Explanation .-For the purposes of this section, the word firm shall include a limited liability partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009.). Removal and resignation of auditor. 25A. (1) The auditor appointed under section 25 may be removed from office before expiry of the term of appointment only by a special resolution: Provided that before taking any action under this sub-section, an auditor proposed to be removed shall be given a reasonable opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e position as stated in the account books and the balance-sheet is correct, regular and not misleading: Provided that the auditor shall also have the right of access to the records of all the subsidiaries and associate companies of the Corporation, in so far as they relate to consolidation of the Corporation s financial statements with those of such subsidiaries and associate companies. (2) The auditor shall make a report to the members on the accounts examined by the auditor and on every financial statement which is required by or under law to be placed in general meeting, and such report shall, after taking into account applicable provisions of this Act and any other law for the time being in force, the standards referred to in section 24B, and matters that are required to be included in the audit report under the provisions of this Act or any other law for the time being in force, and to the best of the information and knowledge of the auditor, state that the said accounts and financial statements give a true and fair view of the state of the Corporation s affairs as at the end of its financial year and profit or loss and cash flow for the year. (3) The auditor s report shall al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as an auditor of the Corporation and appointed as such under section 25, or where the branch or office is situated in a country outside India, the accounts of the branch or office shall be audited either by the Corporation s auditor or by an accountant or by any other person duly qualified to act as an auditor of the accounts of the branch or office in accordance with the laws of that country, and the duties and powers of the Corporation s auditor with reference to the audit of the branch or office and the auditor thereof, if any, shall be such as may be prescribed: Provided that the auditor for a branch or office shall prepare a report on the accounts of the branch or office, examined by such auditor and shall send it to the Corporation s auditor, who shall deal with it in the Corporation s auditor s report in such manner as the Corporation s auditor may consider necessary. Internal auditor. 25C. (1) The Board shall, on the recommendation of the Audit Committee, appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other professional as may be determined by the Board to conduct the internal audit of the functions and activities of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 made by the Securities and Exchange Board of India under the provisions of the Securities and Exchange Board of India Act, 1992, and thereby enabling the listing of LIC on recognised stock exchanges and making of an initial public offer, through which Government may sell its shares in LIC. It is also proposed to insert new sections 4A, 4B, 4C and 4D in the LIC Act to provide for disqualifications to be a director, disclosure of interest by director and senior management, related party transactions and adjudication of penalties for contravention or violation liable to penalty under the LIC Act, in order to bring the provisions relating to corporate governance in alignment with listing requirements. It is also proposed to substitute section 5 of the LIC Act, to provide for LIC s capital, issue of equity shares to the Central Government in consideration for paid-up equity capital provided by the Central Government to LIC before the coming into force of the new section, application of premiums received on issue of LIC s shares, increase or reduction of share capital by the Central Government, maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by its Board, in order to bring the provisions relating to corporate governance in alignment with listing requirements. It is also proposed to amend section 22 of the LIC Act to omit the existing provision under sub-section (2) for constitution of a Board in each zone of LIC and to amend the existing provision for a member of LIC (who corresponds to a director under the proposed amendments) to be a Zonal Manager of LIC, consequential to proposed constitution of Board of LIC under the substituted section 4 and the disqualification to be a director under clause (l) of the new section 4A. It is also proposed to insert new section 23A in the LIC Act, to provide for annual general meeting and other general meetings of registered shareholders of LIC, in order to bring the provisions relating to the rights of LIC s shareholders in alignment with listing requirements. It is also proposed to substitute section 24 of the LIC Act, to provide for LIC having a multiplicity of funds, establishment of reserves and maintenance of separate funds for participating and non-participating policyholders of LIC, which are matters incidental to the proposed new sections 28, 28B and 28C. It is also propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposed to amend section 28A and insert new sections 28B and 28C in the LIC Act, to make provisions regarding the declaration of dividend and crediting of unclaimed and unpaid dividend amount to an Unpaid Dividend Account, in order to bring the provisions relating to dividends in alignment with listing requirements and consequential to the provision under the proposed new section 5 for issue of equity share capital to persons other than the Central Government. It is also proposed to substitute section 46 of the LIC Act, to provide that defects in constitution of the Board and committees thereof, or in appointment or nomination of directors, will not invalidate their acts or proceedings, which are matters incidental to the proposed creation of the Board and its committees under the proposed new sections 4, 19, 19A, 19B, 19C and 19D. It is also proposed to substitute section 47 in the LIC Act, to provide for protection of action taken by a director other than a whole-time director, which are matters incidental to the provision for independent, elected and other categories of non-whole-time directors under the proposed new section 4. It is also proposed to amend sub-section (2) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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