Ajay (CA Job) (512 Points)
09 December 2010A company has made Fixed Deposit in a bank for Rs.6 Crore...what are the implications while conducting an audit vis a vis Section 292 of companies act...is it covered under "the power to make loans" under Sec 292(1)(e) or u/s sec 292(1)(d) - power to make investments?
Jayashree S Iyer
(Company Secretary)
(3224 Points)
Replied 10 December 2010
The investment in the form of FD will fall under Section 292(1) (d) of the Companies Act, 1956. Resolution for Investment must be passed in the Meeting of the Board.
It's an investment of the Company and at the time of audit you have to insist for original FD receipt issued by the Bank for verification. Also check whether the Board Reolution is passed in the physcial Board Meeting and not passed by Circular Resolution
Ansari
(ca final)
(444 Points)
Replied 12 December 2010
| Originally posted by : Jayashree S Iyer | ||
 |
The investment in the form of FD will fall under Section 292(1) (d) of the Companies Act, 1956. Resolution for Investment must be passed in the Meeting of the Board. It's an investment of the Company and at the time of audit you have to insist for original FD receipt issued by the Bank for verification. Also check whether the Board Reolution is passed in the physcial Board Meeting and not passed by Circular Resolution |
 |
Ajay
(CA Job)
(512 Points)
Replied 15 December 2010
Jayashree S Iyer
(Company Secretary)
(3224 Points)
Replied 16 December 2010
Yes Ajay. You will have to specify the limits of investment in the resolution, if the powers are delegated to the CFO. This is the limit upto which the CFO can make investments under the authority granted to him by the Board. As and when the investment exceeds this limit a fresh board resolution delegating higher limits should be passed. Alternatively the Board may decide to delegate powers upto 6 crores only with the CFO and if the investment exceeds this limit, authority for further investments may be exercised by the Board.
Jaideep
(Service)
(1368 Points)
Replied 16 December 2010
| Originally posted by : Jayashree S Iyer | ||
|
|
The investment in the form of FD will fall under Section 292(1) (d) of the Companies Act, 1956. Resolution for Investment must be passed in the Meeting of the Board. It's an investment of the Company and at the time of audit you have to insist for original FD receipt issued by the Bank for verification. Also check whether the Board Reolution is passed in the physcial Board Meeting and not passed by Circular Resolution |
|
I would like to add one more point here, resolution must specify the nature of investment.
Biji mary jacob
(student)
(21 Points)
Replied 22 September 2011
A private limited co.want to subscribe share in a new co. can it do so... if so is there any limitation for subsribing 50% of share of new co.
Soumyabrata
(Company Secretary)
(137 Points)
Replied 10 May 2012
If the investment in Dixed Deposit is short term say for 3 months, then also Sec 292 shall be applied?
Soumyabrata
(Company Secretary)
(137 Points)
Replied 10 May 2012
If the investment in Dixed Deposit is short term say for 3 months, then also Sec 292 shall be applied?
LIVE Course on Foreign Exchange Management Act (FEMA)(with recording)
LIVE Form 10 B and Form 10BB: Handle Tax Audit Reports of Charitable Organizations(with recording)
CAclubindia
