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balance from the one account to a diffent balance in another account. Therefore i should say that theoretically, a cash transaction did take place. In your opinion the same in respect of the trans- action where «rs. Drewer was concerned?.
I am not dealing with an individual, i am speaking generally on the matter. I treat every person on the same hasis, If the Directors allotted
a certain amount of capital to any individual, the security was greater if that amount was transferred to another account.
Provided the person was of lature age, would the fact of his ability to meet the loan on demand at any given date alter the nature of your reply?. Certainly not. On the allottment of shares the Director should see that the man signing the appli- catlon of shares should be capable of paying. Assuming that the management having thought fit to treat these transactions as cash, would you say that no person would have the right to alter that in the books to read anything else but cash trans- actions without the consent of the Directors?. Kersonally, would say this, that once a thing took place, theoretically it would, in my opinion, turn into cash transactions and as an auditor I would not allow it to me ammended without attach- ing some addition to the report.
You are aware that after a specific time a business has commenced a statutory Raport is required under Company Law?.
1 20.
One of the things required in the Statutory Report is the total amount of cash received in respect of
ahares allotted by the company. (Companies Ordin- ance Section 66, Sub-section (3) (b) read). That being so, would you be prepared to go on re- cord stating that the total amount of cash received in respect of shares allotted included all sums obtained under these lettera of application loans?. In my opinion, immediately that transaction took placeconverting the uncalled capital to a loan, the whole of the shares were fully paid.
The amount received to pay up the shares should be included in the figure for the total amount of cash received by the Company in respent of shares?. That is my opinion. All mɔnies received up to the 10% plus the 90% which was taken by the pank or Directors, all these shares were fully paid and had been compiling the same form 1 would have put in the whole of the shares as fully paid. would you go so far as to say that all those items, which you say had the effect of fully paid shares,
would you have included all the amounts so paid as being cash received in respect of the shares?. Isa.
Can you say this, had you been engaged to prepare that statutory Report it would have been substant ially the same, assuming the calculations to be sorrectâ.
Substantially it would have been the same,