Separate the standing record from the on-demand request
Section 128(3) of the Companies Act, 2013 and rule 4 of the Companies (Accounts) Rules, 2014 address directors’ inspection of financial information maintained outside India. Rule 4(1) requires summarised returns of books kept abroad to be sent to and kept at the registered office at quarterly intervals, open to directors for inspection. For other financial information kept abroad, a director personally makes a detailed written request and the company produces the information within fifteen days of receipt.
Read the applicable text: ICSI: Companies Act, 2013, section 128 Gazette: Companies (Accounts) Rules, 2014, rule 4.
Identify whose books are involved
Section 128(2) recognises proper branch books and periodic summarised returns for branch transactions. Rule 4(1) specifically requires the overseas-books quarterly returns at the registered office. A foreign subsidiary is a separate entity; the section 128(3) proviso requires a Board-authorised person for inspection in respect of a subsidiary. Do not treat the subsidiary’s complete ledgers as the Indian company’s branch books.
Build a quarter-by-quarter record
Keep a branch and period inventory, original submissions, local currency totals and the reconciliation used for head-office accounting. Keep subsequent adjustments in a separate bridge so the company can reproduce what the branch sent and what was posted. An annual total may reconcile financially and still leave missing quarterly returns. These are internal transmissions to the company’s registered office under Rule 4, rather than quarterly MCA return filings.
Start the request clock from company receipt
Log the director’s own written request, the full details of the financial information sought, the requested period and the date the company received it. Rule 4(2) deals with other overseas financial information, beyond the standing quarterly returns. Rule 4(4) excludes a request by or through a power-of-attorney holder, agent or representative. Assign responsibility immediately, check completeness against the original request and keep evidence of actual production, including any missing schedules. The fifteen-day examples count elapsed calendar days from receipt and assume no special date issue. A request for clarification should not be treated as automatically resetting the original clock.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Missing quarters despite full-year totals
An overseas branch sends summaries for two of four quarters. The Indian company has two quarterly gaps even if the year-end trial balance covers all four.
Illustrative example 2: Two-branch completeness
Two overseas branches each require four summaries for a full year in this example. Six were received against eight expected; two returns require follow-up.
Illustrative example 3: Ready before the deadline
A valid written request is received on 2 November 2026 and the full file is produced on 14 November. Twelve days elapsed, leaving three days to the fifteen-day control marker.
Illustrative example 4: Late production
A valid request received 2 November is fulfilled on 19 November. Seventeen days elapsed, two beyond the fifteen-day marker; the internal preparation date does not change the production date.
Illustrative example 5: Reconcile branch and head-office postings
The branch shows 125,000 units of local currency for an account. Head office recorded 118,000 units on the same basis. Preserve the original and explain the 7,000-unit difference in a separate bridge.
Illustrative example 6: Incomplete production
A director requests five schedules and receives four before the control date. One schedule remains unproduced; a dispatch acknowledgement for the four does not prove complete production.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Map books by legal entity and location | Branch list, entity chart and ledger custody. |
| 2 | Identify overseas books of the company | Accounting system and branch responsibility matrix. |
| 3 | Set the quarterly delivery cycle | Registered-office intake calendar. |
| 4 | Capture original returns on receipt | Quarter-labelled submissions and receipt evidence. |
| 5 | Reconcile returns to head-office books | Local currency totals and adjustment bridge. |
| 6 | Keep copies available at the registered office | Inspection index and accessible record location. |
| 7 | Log the director’s written request | Requestor, details, period and receipt date. |
| 8 | Check applicable inspection authority | Director identity and subsidiary Board resolution where relevant. |
| 9 | Produce the requested information within the clock | Completeness review and proof of production. |
| 10 | Review missed records and late production | Exceptions, corrective action and completion sign-off. |
Sixteen practitioner FAQs
1. Are quarterly summaries only produced when a director asks?
No. Rule 4(1) creates an ongoing requirement.
2. Where must the overseas-books quarterly returns be kept?
At the registered office.
3. Can the annual consolidated pack replace them?
No. It does not establish quarterly transmission or retention.
4. Can branch figures be corrected in head-office books?
Keep the original and document any correction separately.
5. Do foreign subsidiaries and branches follow identical inspection authority?
No. Verify the separate subsidiary proviso in section 128(3).
6. Can a director send an agent to request information under rule 4(2)?
No. Rule 4(4) requires the director to seek it personally.
7. What should the written request identify?
The financial information sought and the relevant period.
8. When does the fifteen-day clock begin?
From receipt of the written request by the company.
9. Does the rule say fifteen working days?
No. It uses fifteen days.
10. Does a vague request support an assumption about the period?
Seek clarification promptly and preserve the original date and communications.
11. Does a summary answer every detailed request?
No. Reconcile the information produced to the actual request.
12. Does cloud access alone prove quarterly delivery?
No. Keep evidence of quarterly transmission and registered-office availability.
13. What should support an inspection of a subsidiary?
The Board resolution authorising the person for that inspection.
14. Can finance teams set earlier internal deadlines?
Yes. Use them to secure and review records before statutory production.
15. What if supporting records are in another currency?
Preserve original figures and keep the reporting conversion separate.
16. What evidence proves the request was closed?
A dated production record matched item by item to the written request.
Official sources
ICSI: Companies Act, 2013, section 128 Gazette: Companies (Accounts) Rules, 2014, rule 4