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Question Paper
Corporate & other laws Duration: 70
Details: Test-5 (CH- 9,10,15) Marks: 40
Instructions:
All the questions are compulsory
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Q-1. Sunrise Private Limited was incorporated on 30th September 2016. It has a paid-up share
capital of ₹ 60 crore. The company had a turnover of ₹ 320 crore for the financial year 2019-
20. The accounts manager of the company has intimated to the company that they are not
required to appoint an internal auditor for the financial year 2020-21. The management of
the company has approached you to advise them about the appointment of an internal
auditor.
Advise them as per the provisions of the Companies Act, 2013.
(5 Marks)
Q-2 BLACK Limited (the Company) was incorporated on 01.04.2020. The balances extracted
from its audited financial statement are as given below:
Financial Year Net Profit before tax Net Profit after tax (Ignore Income Tax
(FY) computation)
Rs 5.00 crore Rs 3.75 crore
2020-21
Rs 7.00 crore Rs 5.25 crore
2021-22
The Company proposes to allocate the minimum required amount for CSR Activities to be
undertaken during FY 2022-23, if it is mandatory. You are requested to advice the Company
in regard and compute the minimum amount to be allocated, if so required, taking into
account the relevant provisions of the Companies Act, 2013
(6 Marks)
Q-3 The Board of Directors of Summit Limited, a listed company, appointed Mr. Raj, Chartered
Accountant, as its first auditor within 30 days of the date of registration of the company to
hold office from the date of incorporation to the conclusion of the first Annual General
Meeting (AGM). At the first AGM, Mr. Raj was re-appointed to hold office from the conclusion
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of its first AGM till the conclusion of the 6th AGM. In light of the provisions of the Companies
Act, 2013, examine the validity of the appointment/reappointment in the following cases:
(i) Appointment of Mr. Raj by the Board of Directors.
(ii) Re-appointment of Mr. Raj at the first AGM in the above situation.
(6 Marks)
Q-4 Grandfather of Mr. Rajesh Kumar was a farmer in undivided India and owned a large
chunk of land. Due to partition, his grandfather, along with other family members, evacuated
from West Punjab and received a piece of agricultural land in compensation under the
Displaced Persons (Compensation and Rehabilitation) Act, 1954, in that area of East Punjab,
which is present-day Haryana, bordering the NCT.
Such land was inherited by Mr. Anil Kumar and Mr. Sunil Kumar (both residing in India) in
equal portions as per the testament of their grandfather. Mr. Rajesh is the only child of Mr.
Anil. Upon the death of Mr. Anil in 2005, his will was executed, and the piece of land belonging
to him was transferred to Mr. Rajesh.
In 2002, Mr. Rajesh moved to Canada, where he operates an IT consultancy firm. Mr. Rajesh
surrendered his Indian citizenship and holds a Canadian passport. Now, Mr. Rajesh's children
are grown-up. His daughter wants to enter the fashion industry and needs funds. Mr. Rajesh
decided to sell the land inherited from his father (in turn from his grandfather). He
approached Mr. Singh, a property agent, to find a buyer for the said land. It was decided that
part of the proceeds would be used by Mr. Rajesh's daughter, and the rest would be planned
to invest in Canada.
You are required to advise Mr. Rajesh if he can sell/transfer the land he owns in India as per
the relevant provisions of FEMA.
(4 Marks)
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Q-5 Ms. Kavita had resided in India for 182 days in the financial year 2019-20. She went to the
USA on 1st April 2020 and returned to India on 1st July 2021 on an employment contract in
India for a year. She completed her contract and immediately left India. Under Section 2(v) of
FEMA 1999, determine the residential status of Kavita for the financial years:
(i) 2020-21
(ii) 2021-22
(4 Marks)
Q-6 Rajesh Limited, a listed company, appointed M/s. RKC & Co., an audit firm, as the
company's auditor in the Annual General Meeting held on 30-09-2017. Explain the provisions
of the Companies Act, 2013, relating to the appointment or reappointment of an auditor in
relation to the tenure of an auditor.
(5 Marks)
MCQs-
1. XYZ Limited is a public company with a net worth of Rs. 950 crores and a turnover of Rs.
200 crores during the immediately preceding financial year. The company has 9 Directors (P,
Q, R, S, T, U, V, W, and X), with Mr. S, T, U, and V serving as independent directors. Which of
the following statements is correct regarding the constitution of the Corporate Social
Responsibility (CSR) Committee?
(a) The CSR committee may consist of Directors P, Q, and R.
(b) The CSR committee may consist of Directors P, Q, and S.
(c) The CSR committee may consist of Directors P, T, and U.
(d) There is no need to constitute a CSR committee as the turnover is just Rs. 200 crores during
the immediately preceding financial year.
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2. One Person Company shall file a copy of the duly adopted financial statements to the
Registrar in:
(a) 30 days of the date of meeting in which it was adopted.
(b) 90 days of the date of meeting in which it was adopted.
(c) 90 days from the closure of the financial year.
(d) 180 days from the closure of the financial year
3. XYZ Corporation is listed on the National Stock Exchange and has a turnover of INR 6000
crores. XYZ Corporation has 15 subsidiaries, 5 associate companies, and 8 joint venture
companies (collectively referred to as XYZ Group). LMN & Co LLP is the statutory auditor of
XYZ Corporation. XYZ Corporation wants to appoint LMN as the statutory auditors for the
entire XYZ Group. What advice would you give to the management of XYZ Group?
(a) LMN & Co LLP can be appointed as statutory auditors for only 10 companies of XYZ Group.
(b) LMN & Co LLP can be appointed as statutory auditors for only 25 companies of XYZ Group.
(c) LMN & Co LLP can be appointed as statutory auditors for all the companies of XYZ Group.
(d) LMN & Co LLP can be appointed as statutory auditors for all the companies of XYZ Group
provided they meet the limits requirements as per the Companies Act 2013.
(2 x 3 = 6 Marks)
4. Alpha Manufacturing Pvt Ltd, a mid-sized company specializing in the production of eco-
friendly packaging materials, recently held its first Annual General Meeting (AGM) on
September 30, 2023. During this AGM, the company's shareholders appointed Mr. Ramesh, a
well-respected Chartered Accountant from Ramesh & Associates, as the statutory auditor.
Mr. Ramesh's audit firm has a solid reputation and has been involved in auditing several large
corporations.
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Alpha Manufacturing's directors are keen to understand the tenure of Mr. Ramesh's
appointment under the Companies Act, 2013. They are aware that the appointment made at
the first AGM needs to comply with specific provisions regarding the duration of the auditor's
term.
Given this scenario, for how long will Mr. Ramesh serve as the statutory auditor if his
appointment was made during the first AGM held on September 30, 2023?
(a) Until the conclusion of the second annual general meeting in 2025.
(b) Until the conclusion of the fourth annual general meeting in 2027.
(c) Until the conclusion of the sixth annual general meeting in 2029.
(d) Until the conclusion of the eighth annual general meeting in 2031.
5. Mr. K was appointed as a representative of XYZ Company for a 10-day corporate program
organized in the UK. During the said period in the UK, he was diagnosed with a severe kidney
disease, so he decided to have the treatment done in the UK. State the maximum amount
that can be drawn by Mr. K as foreign exchange for the medical treatment abroad.
(a) USD 1,25,000
(b) USD 2,25,000
(c) USD 2,50,000
(d) As estimated by a medical institute offering treatment
6. Mr. X, a person comes to India on 1st June 2019 for visiting his parents. However, his
parents fall sick and he stays till 31st March 2020. Thereafter he continues to stay in India. He
decided to live in India for next 6 months by the time his parents recovers. In the light of the
given case, determine the correct residential status of Mr. X from the given statements.
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(a) Mr. X is PRII as he did reside in India in the FY 2019-2020.
(b) Mr. X is PRII as he reside in India for more than 182 days in the FY 2019 -20.
(c) Mr. X is PROI in the FY 2019-20, but will be treated as PRII from 1st April, 2020, as he
resides in India for more than182 days in the previous FY.
(d) His stay in India is neither for employment, nor for business, nor for circumstances which
show that his stay in India for an uncertain period. In FY 2019-20, he is a PROI as he did not
reside in India for more than 182 in FY 2018-19
7. Mr. Amit, a resident of India, went to Canada for a business deal in January 2019. He
realized foreign exchange for bearing expenses while staying there for the business purpose.
After finalizing the deal, he returned to India on the 28th of February, 2019. Mr. Amit was left
with certain unused foreign exchange. He retained the foreign exchange with him for future
use. Mr. Amit has to return the unused foreign exchange:
(a) Latest by 27th August 2019
(b) Latest by 28th August 2019
(c) Latest by 29th August 2019
(d) Latest by 31st August 2019
(1 x 1 = 4 Marks)
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