Company Secretarial Practise 13 NovemberPresentation Transcript
COMPANY SECRETARIAL PRACTISE AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’s Most Comprehensive programmes in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL
COMPANY SECRETARIAL PRACTISE Dr. T.K. Jain. AFTERSCHO☺OL Centre for social entrepreneurship Bikaner M: 9414430763 [email_address] www.afterschool.tk , www.afterschoool.tk
Name of the proposed company is to be submitted in form 1a.
Consent to act as director
Notice of situation of the office of the company
Particulars of the directors
How do you get registration under section 25?
-non – profit objective
Submit 3 printed copies of Memorandum of association & articles.
3 copies of list of names, descriptions, addresses etc. of directors
3 copes of p&l, balance sheet, audit report, annual report etc. (if already working).
Assets andliabilities statement
Statement regarding future work, expected income, objectives etc.
Prepare a specimen form No. 1A
The Registrar of Companies,
Subject: Availability of Names - Information - Furnishing of
We, the following applicants, are desirous of forming a company to be megistered under the Companies Act, 1 956, in the State of Rajasthan.
Name and full address of the person(s) applying for the availability of the name (in block capitals).: Sudha Soni
Proposed name of the company.: Swarna Pvt. Ltd.
State whether public or private. : Private
In case the proposed name mentioned in item (2) is not available, 3 names to be considered in the order of preference. 1. Abhushan Ltd. 2. Creative Ltd. 3. Ornaments Ltd.
Main object of the proposed company : 1. to make jewellery 2. 3.
Names and addresses of the prospective directors or promoters, etc. 1. Sudha Soni 2. Goti 3. Kap 4. double
Particulars of the names and situation of registered offices of other companies in the same group or under the same management. : There is no company
Proposed authorised capital. : 100 Crores
Please furnish particulars and results of any application moved to this or any other Registrar previously for availability of name. : No
Particulars of remittance of fee (Draft/I PD).: DD No. .. Date ..
Prepare the consent of our directors..
Under Sections 264 (2)/266(1)(a) and 266(1)(b) (iii)]
SWARNA PVT. LTD.
Presented by : goti
The Registrar of Companies
I, the undersigned, hereby testify my consent to act as director of the Limited pursuant to Section 264(2)/266(1)(a) of the Cohipanies Act, 1956 and certify that I have not been disqualified to act as a director under Sections 267 and/or 274 of the Companies Act, 1956.
I, the undersigned, having consented to act as director of the Limited, also hereby undertake to take from the said company and pay for shares of Rs 10000 each, being the number/value of the shares prescribed as tho qualification shares for the office of the director of the said company.
Name and Surname in full and Address: goutam buchha
Date of appointment : 1.1. 9
Nationality : indian
Dated the day of 20
I, the undersigned, having consented to act as director of the Limited, also hereby undertake to take from the said company and pay for shares of Rs each, being the number/value of the shares prescribed as tho qualification shares for the office of the director of the said company.
in full and
1 2 3 4 5 6
Dated the day of 20
Solve the following…
On 1st January, the Managing Director of Goti Ideas Ltd. wishes to know the amount of working capital that will be required during the year. From the following information prepare the working capital requirements forecast. Production during the previous year was 60,000 unIts, It is planned that this level of activity would be maintained during the present year. The expected ratios of the cost to selling prices are Raw materials 60%, Direct wages 10% and Overheads 20%. Raw materials are expected to remain in store for an average of 2 months before issue to production. Each unit is expected to be in process for one month, the raw materials being fed into the pipeline immediately and the labour and overhead costs accruing evenly during the month. Finished goods will stay in the warehouse awaiting dispatch to customers for approximately 3 months. Credit allowed by creditors is 2 months from the date of delivery of raw material. Credit allowed to debtors is 3 months from the date of dispatch Selling price is $ 5 per unit. There is a regular production and sales cycle. Wages and overheads are paid on the 1st of each month for the previous month. The company normally keeps cash in hand to the extent of $.20,000.
Total sales (in $) 60000*5 = 300000
Purchase of raw material = 60% of 3 lakhs = 1,80,000
Stock of raw material = 180000*2/12 = 30000
Work in progress
Raw material = (1 month) = 15000
Labour & overhead (.5 month)= 3lakh*30/100*.5/12=3750
Debtors = 3 lakh*3/12 =75000
Stock of finished goods (cost) : 3 lakh*3/12*90/100 = 67500
The following annual figures relate to Goti Dental Care Ltd. .,
Rs. Sales (at two months’ credit) 36,00,000
Materiais consumed (suppliers extend two months’ credit) 9,00,000
Wages paid (monthly in arrear) 7,20,000
Manufacturing expenses outstanding at the end of the year 80,000
(Cash expenses are paid one month in arrear) -
Total administrative expenses, paid as above 2,40,000
Sales promotion expenses, paid quarterly in advance 1,20,000
The company sells its products on gross profit of 25% counting depreciation as part of the cost of production. It keeps one months’ stock each of raw materials and finished goods, and a cash balance of Rs.1,00,000.
Assuming a 20% safety margin, work out the working capital requirements of the company on cash cost basis. Ignore work-in-process.
Working capital (100+75+215+490+30 -60-80-20-150)=6,00,000 answer.
Calculation of cost of production
Mfg. exp 80000*12 = 960000
Total = 25,80,000
What is working capital ?
The money required for day to day conduct of business is called working capital.
There are two types of working capital:
Gross working capital: total current assets
Net working capital: Current assets – current liabilities.
Policies regarding working capital..
Here we keep a lot of working capital. Working capital also finances long term capital requirements. Thus level of working capital is very high.
Here we keep very low level of working capital. We keep minimum inventory. (Just in time) and we keep minimum cash balances with us. We have a policy of cash sales and discourage credit sale
Quantum of working capital requirements?
The requirements of working capital keeps fluctuating. During peak season (like Diwali in India and New Year in the USA), the requirements of working capital may be very high (due to high inventory, high cash requirements etc.).
Working capital requirements…
As we can see in the previous graph, the working capital requirements keep changing. Sometimes, it is very high, sometimes it is very low. When we require more working capital, we borrow additional money.
We should finance a part of permanent working capital from term loan (WCTL).
What is working capital cycle?
When we have cash, we buy raw material, we hire labour, get the goods manufactured, and send the goods to dealers. When goods are sold out, we are able to collect cash from this and thus working capital cycle is complete. (from cash to cash).
WC Cycle Raw material Labour, overhead etc. Finished goods Debtors Cash
Working capital cycle is also called operating cycle:
R = Raw material storage period (20 days)
W= work in progress period ( 30 days)
F = Finished goods storage period (10 days)
D = Debtors collection period (30 days)
C = Creditors collection period (30 days)
= total = 60 days operating cycle.
How much working capital is enough?
Low working capital means risk of insolvency, lack of opportunity advantages etc.
High working capital – means higher cost of funds, higher interest burden, lower return on investments.
Therefore, keep proper level of working capital. (2:1 or 3:1).
CC account (cash credit loan)
Bank outstanding / overdraft
Short term loans
Short term instruments
LC / Packing credit.
Kap & Goti UnLtd. Have Set up Amritneeram Trust,what is their working capital ?
Stock of finished goods:(240+120+72+120+48) *1/6 = 1,00,000
Cash = 10000
Current liabilities :
Admn. Exp. 12000*4*1/12=4000
Selling exp. 5000*4*1/12 = 1666
Fixed selling exp. 12000/12 = 1000
Labour 20*6000*1/12 = 10000
Manufacturing exp. 6*12000*1/12 = 6000
Working capital =(45000+40000+100000+10000)-(20000+4000+1666+1000+10000+6000)
= 152334 answer.
5*12000 = 60000
80% variable = 48000
Fixed = 12000
Rate of variable = 48000/12000 = 4 per unit.
Goti International has been operating its manufacturing facilities till 31 .3.2006 on a single shift working with the following cost structure:
Cost of Materials 6.00
Wages (out of which 40% fixed)
Overheads (out of which 80% fixed)
Sales during 2005-06 — Rs.4,32,000. As at 31 .3.2006 the company held:
Stock of raw materials (at cost) 36,000
Work-in-progress (valued at prime cost)
Finished goods (valued at total cost)
Sundry debtors 1,08,000
In view of increased market demand, it is proposed to double production by working an extra shift. it is expected that a 10% discount will be available from suppliers of raw materials in view of increased volume of business. Selling price will remain the same. The credit period allowed to customers will remain unaltered. ‘Credit availed of from suppliers will continue to remain at the present level i.e., 2 months. Lag in payment of wages and expenses will continue to remain half a month.
You are required to assess the additional working capital requirements, if the policy to
increase output is implemented.
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