Section 37 in The State Financial Corporations Act, 1951
37. Audit .-
[(1) The accounts of the Financial Corporation shall be audited by auditors duly qualified to act as the auditors under sub-section (1) of section 226 of the Companies Act, 1956 (1 of 1956), who shall be appointed by the Financial Corporation in general meeting of shareholders out of the panel of auditors approved by the Reserve Bank of India for such terms and on such remuneration as the Reserve Bank may fix.](2)Every auditor shall be supplied with a copy of the annual balance sheet of the Financial Corporation, and it shall be his duty to examine it, together with the accounts and vouchers relating thereto, and every auditor shall have a list delivered to him of all books kept by the Financial Corporation and shall at all reasonable times have access to the books, accounts and other documents of the Financial Corporation and may in relation to such accounts examine any director or officer of the Financial Corporation.(3)The auditors shall make a report to the shareholders upon the annual balance sheet and accounts, and in every such report they shall state whether in their opinion the balance sheet is a full and fair balance sheet containing all necessary particulars and properly drawn up so as to exhibit a true and correct view of the state of affairs of the Financial Corporation, and in case they had called for any explanation or information from the Board, whether it has been given and whether it is satisfactory.(4)The State Government may, in consultation with the Comptroller and Auditor-General of India, at any time issue directions to the auditors requiring them to report to it upon the adequacy of measures taken by the Financial Corporation for the protection of its shareholders and creditors or upon the sufficiency of their procedure in auditing the affairs of the Financial Corporation and may enlarge or extend the scope of the audit or direct that a different procedure in audit be adopted, or direct that any other examination be made by the auditors, if in its opinion public interest so requires.(5)The Financial Corporation shall send a copy of every report of the auditors to the Comptroller and Auditor-General of India at least one month before it is placed before the shareholders.(6)Notwithstanding anything contained in the preceding sub-sections, the Comptroller and Auditor-General of India may, either of his own motion or on a request received in this behalf from a State Government, undertake such audit and at such times as he may consider necessary:[* * *] [ Proviso omitted by Act 39 of 2000, Section 25 (w.e.f. 5.9.2000).](7)Every audit report under sub-section (6) shall be forwarded to the State Government and the Government shall cause the same to be laid before the Legislature of the State.[37-A. Inspection.-(1) The ][Small Industries Bank] [ Substituted by Act 39 of 2000, Section 26, for " Development Bank" (w.e.f. 5.9.2000).][at any time may, with the approval of the Central Government, and on being directed so to do by that Government shall cause an inspection to be made by one or more of its officers of the working of any Financial Corporation and its books and accounts; and the ] [Inserted by Act 56 of 1956, Section 21 (w.e.f. 1.10.1956). ][Small Industries Bank] [ Substituted by Act 39 of 2000, Section 26, for " Development Bank" (w.e.f. 5.9.2000).] [shall send the report of such inspection to the Central Government and to the State Government and shall supply a copy thereof to the Financial Corporation.(2)It shall be the duty of every director or every officer of the Financial Corporation to produce to any officer making an inspection under sub-section (1) all such books, accounts and other documents in his custody or power and to furnish him with any statement and information relating to the affairs of the Financial Corporation as the said officer may require of him within such time as the said officer may specify.(3)Notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), or in any other law for the time being in force, no Court, tribunal or other authority shall have power to require the ] [Inserted by Act 56 of 1956, Section 21 (w.e.f. 1.10.1956). ] [Small Industries Bank] [ Substituted by Act 39 of 2000, Section 26, for " Development Bank" (w.e.f. 5.9.2000).][or any of its officers to produce before such Court, tribunal or other authority the report of the inspection made by it under sub-section (1) or any copy thereof.(4)The State Government may, after considering any report sent to it under sub-section (1), give such instructions to the Board as it considers necessary and it shall be the duty of the Board to comply with such instructions.] [Inserted by Act 56 of 1956, Section 21 (w.e.f. 1.10.1956). ]
