Dinesh, Chartered Accountants is statutory auditors of PQR Ltd. MNP Ltd., a subsidiary company of PQR Ltd. propose to give assignment of actuarial services to Ramesh, Chartered Accountant, son of Dinesh. Advise MNP Ltd.

As per the provisions of Section 144 of the Companies Act, 2013: (1) An auditor appointed under the Act shall provide to the company only such other services as are approved by the board of directors or the audit committee, as the case may be, but which shall not include any of the following services whether such services are rendered directly or indirectly to the company or its holding company or subsidiary company accounting and book keeping services internal audit design and implementation' of any financial information system actuarial services investment advisory services investment banking services rendering of outsourced financial services management services other kind of services as may be prescribed In the explanations to Section 144 of the Companies Act, 2013, it is provided that the term 'directly or indirectly' shall include rendering of the services by the auditor: in case of auditor being an individual, either himself or through his relative or any other person connected or associated with such individual or through any other such entity, whatsoever, in which such individual has significant influence or control or whose name, trade name or brand is used by such individual in case of the auditor being a firm, either by itself or through any of its partners or through its parent, subsidiary or associate entity or through any other entity, whatsoever, in which the firm or any partner of the firm has significant influence or control or whose name, trade name or brand is used by the firm or any of its partners. In view of the above provisions, giving of assignment of actuarial services to Mr. Ramesh, son of Mr. Dinesh by MNP Ltd. will be violation of the provisions of Section 144 of the Companies Act, 2013 as: the actuarial services cannot be provided by an auditor; and providing of the said services by Mr. Ramesh to MNP Ltd. will mean providing services indirectly by Mr. Dinesh to the subsidiary company of PQR Ltd. of which he is auditor.