Star Ltd. is an Indian company having registered office at Chennai. It has a foreign subsidiary incorporated in Brazil. The accountant of the foreign subsidiary has informed the secretary of Star Ltd. that audit is not n

Section 137(1) of Companies Act, 2013 requires that a company shall attach along with its financial statements to be filed with the Registrar, the accounts of its subsidiary(ies) which have been incorporated outside India and which have not established their place of business in India. In case of a foreign subsidiary, which is not required to get its accounts audited as per legal requirements prevalent in the country of its incorporation and which does not get such accounts audited, the holding / parent Indian company may place / file such unaudited accounts to comply with requirements of Section 137(1) as applicable. These, however, would need to be translated in English, if the original accounts are not in English Further, the format of accounts of foreign subsidiaries should be, as far as possible, in accordance with requirements under Companies Act, 2013. In case this is not possible, a statement indicating the reasons for deviation may be placed / filed along with such accounts. In light of above, there is no legal requirement for Star Ltd to get the accounts audited of the subsidiary incorporated in Brazil, however, the company may get accounts of its subsidiary audited for its satisfaction. Nowhere does the law prohibit the same.