15-STATUTORY REPORT

Statutory define law(Legal protection)

Statutory Meeting:
Every company limited by share and every company limited by guarantee and having a share capital shall
hold a general meeting of shareholders within six months after the company is entitled to commence
business. This meeting is called “statutory meeting”.

Statutory Report:
Statutory report contains the following information:
(i) Shares allotted
(ii) Cash received against the allotment
(iii) Receipts and Payments of the company.

Auditor’s Certificate:
The auditor has to ensure that the information contained in the statutory report are correct. After having
confirmed that information given in the report is correct, the auditor issues a certificate in this regard.

Contents of Statutory
1) Allotment of Shares:
With respect to the allotment of shares the statutory report should contain the following details.
a. The auditor should carefully study memorandum of association, articles of association and
prospectus of the company.
b. The auditor reviews the minutes of the directors meeting in order to verify that the
allotment has been properly done.
c. Auditor reviews the agreements with the allottees and confirms that shares were allotted
to the same persons with whom such agreements were made.

2) Cash received against shares issued:

The report should contain total amount of cash received in respect of the share allotted.

3) Receipts and Payments Account:

The report should provide an abstract of the receipts and of the payments made there out up to date
within 7days of the date of the report. The details of the receipts should be:
(i) Receipts from shares
(ii) Receipts from debentures
(iii) Receipts from other sources

Similarly payments should be detailed down as follows:

(iv) Preliminary expenses
(v) Commission on issue of shares/PTC/debentures.
(vi) Discount on issues of shares/PTC/debentures.
(vii) Capital Expenditures (Land, building, Plant & Machinery etc).
(viii) Cash in hand
(ix) Cash at bank.
4) Preliminary Expenses/ Discount on issue of shares & Debentures:
Nature and detail of the estimated preliminary expenses as indicated in the prospectus should be
reported.

5) Particulars of directors and other officers:

The report should contain the names, addresses and occupations of the directors, chief executives,
secretary, auditors and legal advisors of the company and the change if any, which have occurred
since the date of incorporation.

6) Detail of change in contracts:

If there is any contract which needs to modified, the particulars of such contracts together with the
particulars of modification should be presented for the information and approval of the members.

7) Underwriting Contracts: underwriter is bank

The report should provide the extent to which underwriting contracts if any have been carried out. If
these contracts have not been carried out, then submit the reasons for their not having been carried
out.

8) Commission and Brokerage:

The report should contain the particulars of any commission or brokerage paid or to be paid in
connection with the issue or sale of share to any directors, chief executives, secretary or officer or to a
private Co. of which he is a director.

9) Affairs of the Company:

A statutory report should contain a brief account of company’s affairs since its incorporation and the
business plan.

10) Certificate of Auditors:

Statutory report must be accompanied by a certificate of auditors confirming the correctness of:

(i) Share Allotment

(ii) Cash received against such allotment
(iii) Receipts and payments of the company.