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Answer part d only. Question 3_(30 marks) (a) Needy Ltd contracted with its bank...

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Answer part d only.

Question 3_(30 marks) (a) Needy Ltd contracted with its bank to raise a loan on 1 January 2020 on the following terms: - Nominal amount of Loan:Rs1,100,000 - Issue costs payable upfront: Rs100,000 One time repayment of Rs1,331,000 on 31 December 2022. The nominal rate of interest is 6.5% per annum. The draft financial statements for the year 2020 tabled at the Audit Committee revealed the following: i. Issue costs of Rs100,000 had been expensed to the profit or loss ii. Interest costs of Rs71,500 (i.e. 6.5% of Rs1,100,000) had been expensed to the profit or loss and classified as current liabilities. iii. The loan of Rs1,100,000 appears as a non-current liability Required: a) Briefly explain the role of Audit committees. (4 marks) b) Explain the factors or pre requisites that should be present for the audit committee to discharge its role effectively. (4 marks) c) As an independent director on the Audit committee what comments would you make on the draft financial statements? (4 marks) d) Using the provisions of IFRS 9, show the liability section of the statement of financial position of Needy Ltd as at 31 December 2020 and the amount that should be expensed to the profit or loss (8 marks)

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