NOP Ltd is a joint venture of Central Government and a private company and is engaged in the busines

NOP Ltd is a joint venture of Central Government and a private company and is engaged in the
business of distribution of electricity in Chennai. The Central Government holds 51%shares of the
company.
The company is acknowledged for its consumer-friendly practices. Initially it was completely
owned by the Government and was running into significant losses but after the joint venture, the
aggregate technical and commercial losses of the company showed a record decline. The
operations of the company have improved significantly as claimed by the management of the
company.
The C&AG wants to conduct the performance audit of one of the departments of the company
through a subordinate office of Indian Audit and Accounts Department. For this purpose, the audit
programme has also been finalized and the Accountant General has intimated the company that
the audit would start within a day’s time. The company is concerned because the programme
which has been received from the Accountant General is quite detailed and would involve
significant time. Further the management of the company is quite surprised as to why this audit
should be conducted as this is not a company subject to such types of audits as per law.
The management of the company would like to have your inputs in respect of this matter. Please
guide.

a) The notice for such type of audit should give reasonable time to the management to prepare themselves. Further it should not be a detailed audit requiring significant time of the
company.

B) The C&AG may conduct such type of audits in respect of NOP Ltd which would get covered in
this criterion, however, the notice for conducting such type of audit should give reasonable
time to the management to prepare themselves.

C) In case of a joint venture such type of audit cannot be performed as per the Companies Act
2013. The company should write to the Registrar of Companies in respect of this matter and
till that time no audit can be started.

D) In case of a joint venture such type of audit cannot be performed as per the Companies Act
2013. Further wherever this is applicable that is only for a small period of time. The company
should write to the Ministry of Corporate Affairs in respect of this matter.