Effective enforceable acknowledgement

State the procedure for the following, explaining the relevant provisions of the
Companies Act:
(i) Appointment of First Auditor when the Board of Directors did not appoint
the First Auditor within one month of the date of registration of the
.company.
(ii) Removal of First-Auditor before the expiry of his term12. How far is Balance Sheet an acknowledgement of a debt of a company? Board of Directors of Halint Abdul & Sultan Company Limited passed a resolution for payment of sitting fees to Directors and the same was shown as fees due to Directors in the Balance Sheet of the Company. Examine whether this provision of fees due to Directors in the Balance Sheet can be considered as an effective enforceable acknowledgement of debt by the company
(a) What books of accounts are required to be kept by a company?
(b) Who are the persons who can inspect books of accounts?
© Can a Director make inspection of the books of accounts through an agent? (d) Can a shareholder inspect books of accounts?
Jlns.
(a) Books of Accounts Required to be Kept
Section 209 of the Companies Act requires every company to maintain at its registered
office proper books of accounts with respect to :
(a) All sums of money received and expended by the company and the matters
in respect of which receipts and expenditure take place,
(b) all sales and purchases of goods by the company,
© the assets and liabilities of the company, and
(d) in the case of a company pertaining to any class of companies engaged in
production, processing, manufacturing, or mining activities, such particulars relating to utilisation of material or labour or to other items of cost as may be prescribed, if such class of companies is required by the Central Government to include such particulars in the books of account.
As noted in the preceding paragraph, Section 209 requires books of accounts to be kept at the registered office of the company. However, the proviso to Sec. 209 allows the company to keep its books of accounts at any other place in India as the Board of Directors may decide and when the Board of Directors so decides, the company shall, within 7 days of the decision, file with the Registrar a notice in writing giving the full address of that other place.
Further, sub-section (3) of Sec. 209 provides that proper books of accounts shall
not be deemed to be kept with respect to the matters specified therein :
(j) if there are not kept such books as are necessary to give a true and fair view
of the state of affairs of the company or branch office, as the case may be, and
to explain its transactions; and
(ii) if such books are not kept on accrual basis and according to the double entry
system of accounting.
Section 541(2) provides that proper books of accounts constitute such books of accounts as are necessary to exhibit and explain the transactions and financial position of the business of the company, including books containing sufficiently detailed entries of daily cash receipts and payments. Also, where the business of the company has involved dealings in goods, statements of the annual stock takings and (except in the case of goods sold by way of ordinary retail trade) of all goods sold and purchased, showing the goods and the buyers and sellers thereof in sufficient detail to enable those goods and those buyers and sellers to be identified should also be maintained.