LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Company audit query..

Ankit Hinduja (Student) (1227 Points)

04 April 2012

1.Contents of the board report requires; Disclosures in Director's Responsibility Statement...

q.what do we mean by Director's Responsibility Statement..

2.Also in the topic Circulation of Annual accounts( Section 219). Any depositor can demand the annual accounts ..

q.What do we mean by depositor ?

3.And persons entitled to receive annual accounts include debenture trustee..

q.What do we mean by debenture trustee ??

4.Also if fresh issue of capital is made by the company it has to pay brokerage as per rates stated in the prospectus.

q..But to whom??

Reply
Follow
Share

5 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 04 April 2012

1. By putting Director's Responsibility Statement in the board report, directors took responsibility regarding 4 points mentioned in section 217(2AA). Kindly read section 217(2AA).

2. Depositor is a person who participates in the deposit scheme launched by the company. In this scheme a person can deposit his money in the company and earn interest. For more info open your IPCC study mat and check chapter of deposit.

3. A trust deed is created while issuing debentures by a company. A trustee of this deed is known as Debenture trustee. Main work of Debenture trustee is to protect the interest of Debenture holders and safeguard their securities. For more info open your IPCC study mat and check topic of debenture. Also check section 117, 117A, 117B, 117C, 118, 119 OF COMPANIES ACT, 1956.

4. To underwriters, if appointed by the company in order to ensure full subscripttion of newly issued shares.

1 Like

Ankit Hinduja (Student) (1227 Points)
Replied 05 April 2012

Thanks sir for your explanation..

But i have one more question..

Audit of forfeiture of shares:

- Generally forfeiture is made on the non pymt. of a call.

- however forfeiture is also possible on any bonafide ground contained in the articles.

sir, here what do we mean by bonafide grounds ?

also sir can u take a look at this link: Company audit query.

Sir i would also like to seek ur advice regarding my study approach:

Sir what i do is (in audit subject), whenever i study a topic / question where a new provision is given , first i give it a thorough reding and then i ask various questions to myself , like the reason for the provision and so on.

What i think is just learning the provision wont help and if i understand the topic with its reason it will be much more easier to write it in the exam..

Sir, is my approach correct ?

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 07 April 2012

Dear Ankit,

First understand bonafide in this query means---forfeiture of a shareholders’ shares by the company in good faith.

Let me give you an example: Suppose Mr. Ankit Hinduja shareholder of XYZ private Limited, start troubling the company management by making fake allegations against the company, misusing section 397 and 398 by saying company is doing oppression and mis-management, start creating problems in the general meeting of the company without any reason. In this scenario company can take action against Ankit Hinduja by forfeiting his shares (even fully paid up) in bonafind interest of the company, due to the power given by the AOA.

But here it is duty of the company to use power of AOA for the benefit of company and not to settle its personal issue against Mr. Ankit Hinduja.

My expert section reply----go to the site of any big listed company like reliance and download the annual report of the company. In the annual report you will find the directors report u/s 217. Read this directors’ report you will get to know so many things that you cannot imagine. In this directors report you will get to know everything about technology absorption etc

Regards

1 Like

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 07 April 2012

Originally posted by : Ankit Hinduja
	Sir i would also like to seek ur advice regarding my study approach: Sir what i do is (in audit subject), whenever i study a topic / question where a new provision is given , first i give it a thorough reding and then i ask various questions to myself , like the reason for the provision and so on. What i think is just learning the provision wont help and if i understand the topic with its reason it will be much more easier to write it in the exam.. Sir, is my approach correct ?

Dear Ankit,

There is no fixed formula or approach to study. But I am very happy to see that you have developed a different and your own approach and it is mind blowing. You approach is perfect.

Let me also tell you as an auditor-----tum dhoom macha doga yar….get ready to be selected in BIG4. Ghar sa la jayanga tumko wo….with this kind of knowledge gaining strategy.

All the best

1 Like