THE COMPANIES ORDINANCE, 1972

Audit

155.—(1) Every company shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that, until the conclusion of the next annual general meeting.

(2)  At any annual general meeting a retiring auditor, however appointed, shall be reappointed without any resolution being passed unless : —

(a)   he is not qualified for reappointment; or

(b)   a resolution has been passed at that meeting appointing another person or persons to be auditor of the company instead of him, or providing expressly that he shall not be reappointed ; or

(c)   he has given the company notice in writing of his unwillingness to be reappointed :

Provided that where notice is given of an intended resolution to appoint some person or persons instead of a retiring auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons (as the case may be) the resolution cannot be proceeded with, the retiring auditor shall not be automatically reappointed by virtue of this subsection.

(3)  Where at an annual general meeting no auditors are appointed or reappointed, the Registrar may appoint a person to fill the vacancy.

(4)  The company shall, within one week after the conclusion of an annual general meeting at which no auditor is appointed or deemed by this section to be reappointed, give the Registrar notice of that fact, and, if a company fails to give notice as required by this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

(5)  Subject as hereinafter provided, the first auditors of a company may be appointed by the directors at any time before the first annual general meeting, and auditors so appointed shall hold office until the conclusion of that meeting ; Provided that—

(a)   the company may at an extraordinary general meeting held before the first annual general meeting of the company remove any such auditors, and appoint in their place any other persons who have been nominated for appointment by any shareholder of the company, and of whose nomination notice has been given to the shareholders of the company not less than fourteen days before the date of the meeting ; and

(b)   if the directors fail to exercise their powers under this subsection, the company in general meeting may appoint the first auditors, and thereupon the said powers of the directors shall cease ; and

(c)   an auditor appointed by the directors under this subsection shall not be reappoinled at the first annual general meeting of the company unless a a resolution is passed by the meeting that he shall be reappointed.

(6)   The directors may fill any casual vacancy in the office of auditor, but while any such vacancy continues, the surviving or continuing auditor or auditors, if any, may act.

(7)  The remuneration of the auditors of a company—

(a)   in the case of an auditor appointed by the directors or by the Registrar, shall be fixed by the directors or the Registrar, as the case may be ;

(b)   subject to the foregoing paragraph, shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine.

For the purposes of this subsection, any sums paid by the company in respect of the auditors' expenses shall be deemed to be included in the expression "remuneration".

(8)  If a company avails itself of section 141, it shall be deemed for the purpose of this section to have held an annual general meeting at the latest date which by section 119(1) it is required to hold such a meeting, and it shall be deemed to have passed no resolution relating to the appointment of an auditor at that meeting.

(9)  Notice of a nomination under paragraph (a) of subsection (5) may be given to shareholders with or in the same way as notice of the meeting at which a resolution appointing the nominee is intended to be proposed.

156.—(1) If the notice calling an annual general meeting or an extraordinary general meeting held under section 155(5) contains notice of a proposal that the person who is the auditor of the company, or that any of the persons who are auditors of the company, at the date of the notice shall not be reappointed, or that another person shall be appointed to be an auditor of the company, this section shall apply, and it shall be immaterial whether the meeting is called by the directors, the Registrar or any other person or by order of the court, and whether the proposal is included in the notice of the meeting at the instance of the directors or any other person.

(2)  The directors or the other person who calls the general meeting shall give written notice of the proposal to the auditor or to all the auditors of the company (if more than one) holding office at the date of the 'notice calling the meeting : —

(a)   if the meeting is called pursuant to a requisition made under section 120(2), at least fifteen days before the notice calling the meeting is sent out or advertised under section 127 ;

(b)   in any other case, at least one month before the the notice calling the meeting is sent out or advertised as aforesaid.

(3)  If any auditor holding office at the date of the notice calling the meeting makes written representations in respect of the proposal to the company (not exceeding a reasonable length) and requests the notification of such representations to members of the company, the company shall, unless the representations are received by it too late for it to do so : —

(a)   in every notice or advertisement relating to the meeting at which the proposal is to be considered state the fact of the representations having been made;

(b)   send a copy of the representations to every member; and

(c)    in any advertisement of the meeting published under section 127(4), state that copies of the representations may be obtained by any shareholder or debenture holder or trustee for debenture holders of the company on written request being made at an address in Seychelles given for the purpose ; and id) send a copy of the representations to every shareholder, debenture holder or trustee for debenture holders of the company (not being a member thereof) within two days after receipt of a written request by him for such a copy at the address given in the advertisement of the meeting published under section 127(4), or if no such adver-ment is published, at the company's registered office ; and if a copy of the representations is not sent as aforesaid because it is received too late or because of the company's default, the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting :

Provided that copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved made within seven days after the receipt of the representations by the company, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter ; and the court may order the company's costs on an application under this section to be paid in whole or in part by the auditor.

(4) If a company : —

(a)   fails to give written notice of a proposal to which this section applies to the auditor or all the auditors (if more than one) in compliance with subsection (2); or

(b)   fails in any notice or advertisement relating to the meeting at which the proposal is to be considered to state that representations have been made by an auditor in respect of the proposal (if that is the case); or

(c)   fails to send a copy of any written representations made by an auditor in respect of the proposal to every member of the company in compliance with subsection (3), and to every shareholder or debenture holder or trustee for debenture holders who makes a written request for such a copy within two days after the request is received by the company;

the company and every officer of the company who is in default shall be guilty of an offence punishable by a fine not exceeding one thousand rupees.

157.—(1) A person shall not be qualified for appointment as auditor of a company unless either : —

(a)   he is a member of a body of accountants (whether established, in or outside Seychelles) for the time being recognised for the purposes of this section by the Minister; or

(b)   he is for the time being authorised by the Registrar to be so appointed, either as having similar qualifications, or as having obtained adequate knowledge and experience in the course of his employment by a member of a body of accountants recognised for the purposes of paragraph (a) of this subsection, or as having practised as an accountant in Seychelles before the coming into force of this Ordinance.

(2)  None of the following persons shall be qualified for appointment as auditor of a company—

(a)   an officer or servant of the company :

(b)   a person who is a partner of or in the employment of an officer or servant of the company ;

(c)   a body corporate ;

(d)   a person who is disqualified from being appointed to be a director of any company by an order of the court made under section 165(1) :

Provided that if three or more persons carry on practice as accountants in partnership in Seychelles, any one or more of them (not being officers or servants of the company) may be appointed to be an auditor or auditors of a company notwithstanding that another of them is an officer or servant, or others of them are officers or servants, of the company, if those of them who are appointed auditors of the company exceed in number those of them who are officers or servants of the company.

(3)  A person shall not be qualified for appointment as auditor of a company if he is, by virtue of the subsection (2), not qualified for appointment as auditor of any other company or body corporate which belongs to the same group of companies as the first mentioned company, or would not be qualified for such appointment if the body corporate which belongs to the same group of companies as aforesaid were a company,

(4) If any person who is not qualified to be appointed an auditor of a company makes a report to the members or debenture holders of the company on the company's annual accounts or on the directors' annual reporr. he shall be guilty of an offence punishable by a fine not exceeding ten thousand rupees or by imprisonment for not more than two years, or to both such fine and such imprisonment.

158.—(1) The auditors of a company shall make a report to the members and debenture holders of the company on the accounts examined by them, and on every balance sheet, every profit and loss account and all group accounts laid before an annual general meeting of the company, or if the company avails itself of section 141, all such accounts circulated to its shareholders and debenture holders, during their tenure of office.

(2)  The auditors, report shall be read out at the annual general meeting and shall be open to inspection by any person entitled to attend the meeting.

(3)  The report shall state whether in the auditors' opinion the company's balance sheet and profit and loss account, and (if it is required by section 143 to prepare group accounts) the group accounts, have been properly prepared in accordance with the provisions of this Ordinance, and whether in their opinion a true and fair view is given : —

(i) in the case of the balance sheet, of the state of the company's affairs as at the end of its financial year;

(ii) in the case of the profit and loss account (if it be not framed as a consolidated profit and loss account), of the company's profit or loss for its financial year ;

(iii) in the case of group accounts, of the state of affairs and profit or loss of the company and its subsidiaries dealt with thereby, so far as concerns members, shareholders and debenture holders of the company.

(4)  It shall be the duty of the auditors of a company, in preparing their report under this section, to carry out such investigations as will enable them to form an opinion as to the following matters, that is to say—

(a) whether proper books of account have been kept by the company and proper returns adequate for their audit have been received from branches not visited by them ; and

(b) whether the company's balance sheet and (unless it is framed as a consolidated profit and loss account) profit and loss account are in agreement with the books of account and returns ; and if the auditors are of opinion that proper books of account have not been kept by the company or that proper returns adequate for their audit have not been received from branches not visited by them, or if the balance sheet and (unless it is framed as a consolidated profit and loss account) profit and loss account are not in agreement with the books of account and returns, the auditors shall state that fact in their report

(5)  If a company is a holding company, the duties of the auditors of the company under subsection (4) shall extend to the books of account and returns of its subsidiaries and to the group accounts of the company.

(6)  Every auditor of a company shall have a right of access at all times to the books, accounts and vouchers of the company, and (if it is a holding company) of its subsidiaries, and every auditor shall be entitled to require from the officers of the company and its subsidiaries such information and explanation as he thinks necessary for the performance of the duties of the auditors.

(7)  If the auditors fail to obtain all the information and explanations which, to the best of their knowledge and belief, are necessary for the purposes of their audit, they shall state that fact in their report.

(8)  The auditors of a company shall be entitled to attend any general meeting of the company and to receive all notices of, and other communications relating to, any general meeting which any shareholder of the company is entitled to receive, and to be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as auditors.

(9)  The auditors of a company shall have the powers conferred by this section, and shall be subject to the same duties as are imposed thereby, in carrying out their duty under section 153(5) to report on omissions from, and inaccuracies in, the directors' annual report.