Chapter 9 Leave a Comment / By / Accounts of Company As per the provisions of the Companies Act, 2013, which of the following statement is correct with respect to the surplus arising out of the CSR activities: The surplus cannot exceed five percent of total CSR expenditure of the company for the financial year. The surplus shall not form part of the business profit of a company The surplus cannot exceed 10 percent of total CSR expenditure of the company for the financial year. The surplus shall form part of the business profit of a company None ABC Limited dealing in FMCG has its registered office at Mumbai. The composition of the Board of Directors and Key Managerial Personnel are - Mr. P (Managing Director), Mr. Q (Director), Mr. R (Director), Mr. S (Nominee Director), Mr. V (Chief Financial Officer), Mr. W (Whole Time Company Secretary). If any compliance relating to maintenance and keeping of books of accounts of Companies Act, 2013 is not followed by the company then penalty for contravention will be imposed on the following persons – Mr. P and Mr. V Mr. P, Mr. Q, Mr. R and Mr. S Mr. P, Mr. S, Mr. V and Mr. W Mr. P, Mr. Q, Mr. R, Mr. S, Mr. V and Mr. W None Ganesh Company Ltd, a public company incorporated under the Companies Act, 2013 has Mr. Jay- Director, Mr. Sagar – Independent Director, Mr. Abhishek – Nominee Director and Mr. Yash – Whole time director. Mr. Abhishek wants to inspect the books of accounts of Shankar Company Limited, the subsidiary of Ganesh Company Limited. You are required to state whether Mr. Abhishek is eligible to inspect the books of accounts of Ganesh Company Limited? Yes, Mr. Abhishek can inspect the books of accounts of Shankar Company limited only on authorization of the public financial institution on whose behalf he has been so appointed in the board of the Ganesh Company Ltd. No. Mr. Abhishek being a nominee director can only inspect the books of accounts of Ganesh Company Ltd and not its subsidiary company. Yes, Mr. Abhishek can inspect the books of accounts of Shankar Company limited only on authorization by way of resolution of the board of directors. Yes, Mr. Abhishek can inspect the books of accounts of Shankar Company limited only on authorization by way of resolution of the members holding not less than 25% of the paid up share capital of the company. None One Person Company shall file a copy of the duly adopted financial statements to the Registrar in: 30 days of the date of meeting in which it was adopted. 90 days of the date of meeting in which it was adopted. 90 days from the closure of the financial year 180 days from the closure of the financial year None Adani Enterprises Limited has its shares listed on a recognized stock exchange in India. During the current financial year ending March 2020, the securities and exchange board of India (SEBI) has found some irregularities in the filings made by the company. Accordingly, SEBI proposes to make an application to the Tribunal for reopening of the books of accounts of the Company. You, as an expert, are called upon by SEBI to advise with which last financial year for reopening of books of accounts an application can be made? 2015-2016 2013-2014 2010-2011 2011-2012 None Perfect Ltd is a listed company. The company is in the business of manufacturing of steel and had its head office at Karnataka. The company’s operations are spread out across India. The company appointed a firm of Chartered Accountants, N & Co LLP, as its internal auditors for the year ended 31st March 2019. However, for the financial year 2019-20, the company is planning to have an in-house internal audit system CA Harsh Gupta CA_Law_HarshGupta commensurate with its size and operations. If the company does that then it is planning not to continue with N & Co LLP as its internal auditors. Please advise The company being listed needs to have a firm of CA as its internal auditors and hence the company needs to continue with N & Co LLP or appoint some other firm. The company being listed needs to have a firm of CA as its internal auditors and hence the company needs to continue with N & Co LLP or may appoint some other consultant which may not be a firm. The company being listed should not change its internal audit process within a year and hence should continue with N & Co LLP. If the internal audit function of the company is fine as per its size and operations then it may decide not to continue with N & Co LLP. None Silver Private Limited was incorporated in 2016 having its registered office at Gurugram, Haryana. It is registered with an authorised share capital of 10 crore divided into 1 crore equity shares of 10/- each. The paid-up share capital of the company is 50 lakh divided into 5 lakh equity shares of 10/- each. The company is in manufacturing of rubber parts to be used in manufacturing of parts of passenger vehicles. Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) on January 8, 2022 had advanced a loan of 50 lakh at an interest rate of 8% p.a. and the loan is expected to be repaid after a period of thirty six months. Silver Private Limited intends to accept deposits of 60 lakh from its members for the purpose of expansion of its business. The financial particulars of the company are as below mentioned: - S. No. Particulars Amount (1) Paid-up share capital 50 lakh; (2) Free Reserves 20 lakh; (3) Security premium 10 lakh; (4) Borrowings from banks 65 lakh; (5) Turnover 200 lakh As on the date of acceptance of deposits, the company has not defaulted in repayment of borrowings along with interest thereon. The Company Secretary of the company informed Board of Directors of the company that they need to appoint an internal auditor for audit of the company. The Board stated that statutory auditor is already performing audit function and there is no need to appoint internal auditor as it causes additional burden on the company. The company require funds for the purpose of meeting working capital requirements. The company has approached the bank for meeting working capital requirements and has availed a loan of 65 lakh from bank. The loan is secured by the personal guarantee of the directors of the company. Question - With respect to loan advances by Mr. Siddharth to Silver Private Limited, whether the same can be classified as deposit or not? It will be treated as deposit as the loan is advanced by Mr. Siddharth who is neither director nor shareholder of the company. It will be treated as deposit as the loan is given by relative of the director. It will not be treated as deposit as Mr. Siddharth has given loan to the company at an interest rate of 8% p.a. It will not be treated as deposit if Mr. Siddharth gives a written declaration to the effect that loan is advanced by him from his own source of funds, not from borrowings or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board’s Report. None Silver Private Limited was incorporated in 2016 having its registered office at Gurugram, Haryana. It is registered with an authorised share capital of 10 crore divided into 1 crore equity shares of 10/- each. The paid-up share capital of the company is 50 lakh divided into 5 lakh equity shares of 10/- each. The company is in manufacturing of rubber parts to be used in manufacturing of parts of passenger vehicles. Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) on January 8, 2022 had advanced a loan of 50 lakh at an interest rate of 8% p.a. and the loan is expected to be repaid after a period of thirty six months. Silver Private Limited intends to accept deposits of 60 lakh from its members for the purpose of expansion of its business. The financial particulars of the company are as below mentioned: - S. No. Particulars Amount (1) Paid-up share capital 50 lakh; (2) Free Reserves 20 lakh; (3) Security premium 10 lakh; (4) Borrowings from banks 65 lakh; (5) Turnover 200 lakh As on the date of acceptance of deposits, the company has not defaulted in repayment of borrowings along with interest thereon. The Company Secretary of the company informed Board of Directors of the company that they need to appoint an internal auditor for audit of the company. The Board stated that statutory auditor is already performing audit function and there is no need to appoint internal auditor as it causes additional burden on the company. The company require funds for the purpose of meeting working capital requirements. The company has approached the bank for meeting working capital requirements and has availed a loan of 65 lakh from bank. The loan is secured by the personal guarantee of the directors of the company. With respect to acceptance of deposits from members, which of the below mentioned statement is correct Silver Private Limited cannot accept deposits of more than paid-up share capital which is 50 lakh. Silver Private Limited can accept deposits of 60 lakh from members, as it is less than twice of its paid up share capital or 50 crore, whichever is less. Silver Private Limited cannot accept deposits of more than higher of aggregate of paid-up share capital and free reserves which is 70 lakh and borrowings which is 65 lakh. Silver Private Limited cannot accept deposits of more than aggregate of paid-up share capital and free reserves, which is 70 lakh. None Silver Private Limited was incorporated in 2016 having its registered office at Gurugram, Haryana. It is registered with an authorised share capital of 10 crore divided into 1 crore equity shares of 10/- each. The paid-up share capital of the company is 50 lakh divided into 5 lakh equity shares of 10/- each. The company is in manufacturing of rubber parts to be used in manufacturing of parts of passenger vehicles. Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) on January 8, 2022 had advanced a loan of 50 lakh at an interest rate of 8% p.a. and the loan is expected to be repaid after a period of thirty six months. Silver Private Limited intends to accept deposits of 60 lakh from its members for the purpose of expansion of its business. The financial particulars of the company are as below mentioned: - S. No. Particulars Amount (1) Paid-up share capital 50 lakh; (2) Free Reserves 20 lakh; (3) Security premium 10 lakh; (4) Borrowings from banks 65 lakh; (5) Turnover 200 lakh As on the date of acceptance of deposits, the company has not defaulted in repayment of borrowings along with interest thereon. The Company Secretary of the company informed Board of Directors of the company that they need to appoint an internal auditor for audit of the company. The Board stated that statutory auditor is already performing audit function and there is no need to appoint internal auditor as it causes additional burden on the company. The company require funds for the purpose of meeting working capital requirements. The company has approached the bank for meeting working capital requirements and has availed a loan of 65 lakh from bank. The loan is secured by the personal guarantee of the directors of the company. Question - Is Silver Private Limited required to appoint internal auditor in accordance with the provisions of the Companies Act, 2013? Silver Private Limited is not required to appoint internal auditor as private companies are not required to appoint internal auditor. Silver Private Limited is required to appoint internal auditor as borrowings is below prescribed limited. Silver Private Limited is required to appoint internal auditor as aggregate of paid-up share, free reserves and security premium is more than prescribed limited. Silver Private Limited is not required to appoint internal auditor as turnover is less than prescribed limited. None Silver Private Limited was incorporated in 2016 having its registered office at Gurugram, Haryana. It is registered with an authorised share capital of 10 crore divided into 1 crore equity shares of 10/- each. The paid-up share capital of the company is 50 lakh divided into 5 lakh equity shares of 10/- each. The company is in manufacturing of rubber parts to be used in manufacturing of parts of passenger vehicles. Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) on January 8, 2022 had advanced a loan of 50 lakh at an interest rate of 8% p.a. and the loan is expected to be repaid after a period of thirty six months. Silver Private Limited intends to accept deposits of 60 lakh from its members for the purpose of expansion of its business. The financial particulars of the company are as below mentioned: - S. No. Particulars Amount (1) Paid-up share capital 50 lakh; (2) Free Reserves 20 lakh; (3) Security premium 10 lakh; (4) Borrowings from banks 65 lakh; (5) Turnover 200 lakh As on the date of acceptance of deposits, the company has not defaulted in repayment of borrowings along with interest thereon. The Company Secretary of the company informed Board of Directors of the company that they need to appoint an internal auditor for audit of the company. The Board stated that statutory auditor is already performing audit function and there is no need to appoint internal auditor as it causes additional burden on the company. The company require funds for the purpose of meeting working capital requirements. The company has approached the bank for meeting working capital requirements and has availed a loan of 65 lakh from bank. The loan is secured by the personal guarantee of the directors of the company. Question - Which of the following statement is correct in respect of loan of ` 65 lakh availed by the company? Silver Private Limited needs to create and register charge within 30 days from the date of sanction of loan. Silver Private Limited is not required to create and register charge as the loan is against the personal guarantee of directors. Silver Private Limited needs to create and register charge within 15 days from the date of sanction of loan. Silver Private Limited needs to create and register charge within 60 days from the date of sanction of loan. None Silver Private Limited was incorporated in 2016 having its registered office at Gurugram, Haryana. It is registered with an authorised share capital of 10 crore divided into 1 crore equity shares of 10/- each. The paid-up share capital of the company is 50 lakh divided into 5 lakh equity shares of 10/- each. The company is in manufacturing of rubber parts to be used in manufacturing of parts of passenger vehicles. Mr. Raj and Mr. Pawan are directors of the company. Mr. Siddharth (son of Mr. Raj) on January 8, 2022 had advanced a loan of 50 lakh at an interest rate of 8% p.a. and the loan is expected to be repaid after a period of thirty six months. Silver Private Limited intends to accept deposits of 60 lakh from its members for the purpose of expansion of its business. The financial particulars of the company are as below mentioned: - S. No. Particulars Amount (1) Paid-up share capital 50 lakh; (2) Free Reserves 20 lakh; (3) Security premium 10 lakh; (4) Borrowings from banks 65 lakh; (5) Turnover 200 lakh As on the date of acceptance of deposits, the company has not defaulted in repayment of borrowings along with interest thereon. The Company Secretary of the company informed Board of Directors of the company that they need to appoint an internal auditor for audit of the company. The Board stated that statutory auditor is already performing audit function and there is no need to appoint internal auditor as it causes additional burden on the company. The company require funds for the purpose of meeting working capital requirements. The company has approached the bank for meeting working capital requirements and has availed a loan of 65 lakh from bank. The loan is secured by the personal guarantee of the directors of the company. Question - The management of Silver Private Limited for ease of doing business and reduce compliance burden, proposed, it to be registered as a small company. Within the provided information and the legal requirements under the Companies Act, 2013, recommend on the validity of the said proposal: Proposal is valid, as any private limited company can apply for the status of small company. Proposal is invalid, as the Silver Private Limited is not fulfilling the requirement of turnover of 400 crore. Proposal is valid, as the Silver Private Limited is fulfilling the requirement of paid up share capital and turnover which is within the prescribed limits. Proposal is invalid, as Silver Private Limited is fulfilling the requirement of paid up share capital. None The financial particulars of ABC Limited in respect of immediately preceding financial year are as under: S. No. Particulars Amount in crore 1 Net worth 280 2 Turnover 550 3 Net Profit 5.50 4 Borrowings 60 Choose the correct option in terms that whether the provisions of Corporate Social Responsibility are applicable to ABC Limited. No, as ABC Limited is having net worth of more than 250 crore in the immediately preceding financial year. Yes, as ABC Limited is having turnover of more than 500 crore but less than 800 crore in the immediately preceding financial year. Yes, as ABC Limited is having net profit of more than 5 crore in the immediately preceding financial year. Yes, as ABC Limited is having loans and borrowings of more than 50 crore in the immediately preceding financial year None Under what circumstances is the requirement for constituting a Corporate Social Responsibility (CSR) Committee waived, and who is responsible for discharging the functions of the CSR Committee in such cases? When the amount to be spent by a company does not exceed fifty lakh rupees; the Board of Directors assumes the responsibility of the CSR Committee's functions. When the amount to be spent by a company exceeds fifty lakh rupees; the Board of Directors assumes the responsibility of the CSR Committee's functions. When the amount to be spent by a company does not exceed fifty lakh rupees; the shareholders assume the responsibility of the CSR Committee's functions. When the amount to be spent by a company exceeds fifty lakh rupees; the shareholders assume the responsibility of the CSR Committee's functions None Golden Limited is a listed company which is incorporated in 2013 having its registered office at Delhi and corporate office in Noida. It is registered with an authorised share capital of 20 crore divided into 2 crore equity shares of 10/- each. The paid-up share capital of the company is 10 crore divided into 1 crore equity shares of 10/- each. The company is in construction activities like construction of buildings, roads, etc. On 8th January, 2022, the company incorporated a wholly owned subsidiary, D Limited which is involved in supplying of construction materials like steel, iron, cement, bricks, etc. D Limited elects to choose to prepare its first financial statements for the period from 8th January, 2022 to 31st March, 2022. On 2nd January, 2022, Golden Limited incorporated a new wholly owned subsidiary, E Limited for providing project management consultancy service to its customers or to parent company. On 5th January, 2022, Golden Limited through its subsidiary, E Limited acquired 100% partnership interest in XYZ & Co., partnership firm. E Limited elects to choose to prepare its first financial statements for the period from 2nd January, 2022 to 31st March, 2023 and conducted its Annual General Meeting on 16th August, 2023. On 1st July, 2022, the subsidiary company, D Limited incorporated a new wholly owned subsidiary, F Limited. Golden Limited prepared its standalone financial statements for the year 2021-22 and presented before the Board of Directors of the company on 25th August, 2022 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 2nd September, 2022. Golden Limited prepared its standalone and consolidated financial statements for the year 2022-23 and presented before the Board of Directors of the company on 20th August, 2023 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 26th September, 2023. Question -What is the last date for conducting AGM for E Limited? 30th September, 2022 31st December, 2022 30th September, 2023 31st December, 2023 None Golden Limited is a listed company which is incorporated in 2013 having its registered office at Delhi and corporate office in Noida. It is registered with an authorised share capital of 20 crore divided into 2 crore equity shares of 10/- each. The paid-up share capital of the company is 10 crore divided into 1 crore equity shares of 10/- each. The company is in construction activities like construction of buildings, roads, etc. On 8th January, 2022, the company incorporated a wholly owned subsidiary, D Limited which is involved in supplying of construction materials like steel, iron, cement, bricks, etc. D Limited elects to choose to prepare its first financial statements for the period from 8th January, 2022 to 31st March, 2022. On 2nd January, 2022, Golden Limited incorporated a new wholly owned subsidiary, E Limited for providing project management consultancy service to its customers or to parent company. On 5th January, 2022, Golden Limited through its subsidiary, E Limited acquired 100% partnership interest in XYZ & Co., partnership firm. E Limited elects to choose to prepare its first financial statements for the period from 2nd January, 2022 to 31st March, 2023 and conducted its Annual General Meeting on 16th August, 2023. On 1st July, 2022, the subsidiary company, D Limited incorporated a new wholly owned subsidiary, F Limited. Golden Limited prepared its standalone financial statements for the year 2021-22 and presented before the Board of Directors of the company on 25th August, 2022 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 2nd September, 2022. Golden Limited prepared its standalone and consolidated financial statements for the year 2022-23 and presented before the Board of Directors of the company on 20th August, 2023 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 26th September, 2023. Question - What is the due date for conducting AGM for Golden Limited for the year ended March 31, 2023? 30th September, 2023 31st October, 2023 30th November, 2023 31st December, 2023 None Golden Limited is a listed company which is incorporated in 2013 having its registered office at Delhi and corporate office in Noida. It is registered with an authorised share capital of 20 crore divided into 2 crore equity shares of 10/- each. The paid-up share capital of the company is 10 crore divided into 1 crore equity shares of 10/- each. The company is in construction activities like construction of buildings, roads, etc. On 8th January, 2022, the company incorporated a wholly owned subsidiary, D Limited which is involved in supplying of construction materials like steel, iron, cement, bricks, etc. D Limited elects to choose to prepare its first financial statements for the period from 8th January, 2022 to 31st March, 2022. On 2nd January, 2022, Golden Limited incorporated a new wholly owned subsidiary, E Limited for providing project management consultancy service to its customers or to parent company. On 5th January, 2022, Golden Limited through its subsidiary, E Limited acquired 100% partnership interest in XYZ & Co., partnership firm. E Limited elects to choose to prepare its first financial statements for the period from 2nd January, 2022 to 31st March, 2023 and conducted its Annual General Meeting on 16th August, 2023. On 1st July, 2022, the subsidiary company, D Limited incorporated a new wholly owned subsidiary, F Limited. Golden Limited prepared its standalone financial statements for the year 2021-22 and presented before the Board of Directors of the company on 25th August, 2022 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 2nd September, 2022. Golden Limited prepared its standalone and consolidated financial statements for the year 2022-23 and presented before the Board of Directors of the company on 20th August, 2023 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 26th September, 2023. Question - The Companies Act, 2013 provides that in addition to standalone financial statement, the company shall also prepare consolidated financial statements which shall also be presented at AGM. Accordingly, the consolidated financial statements of Golden Limited for the financial year ended 31st March, 2022 includes, financial statements: Golden Limited and D Limited Golden Limited, D Limited and E Limited Golden Limited, D Limited, E Limited and XYZ & Co., partnership firm Golden Limited, D Limited, E Limited, F Limited and XYZ & Co., partnership firm None Golden Limited is a listed company which is incorporated in 2013 having its registered office at Delhi and corporate office in Noida. It is registered with an authorised share capital of 20 crore divided into 2 crore equity shares of 10/- each. The paid-up share capital of the company is 10 crore divided into 1 crore equity shares of 10/- each. The company is in construction activities like construction of buildings, roads, etc. On 8th January, 2022, the company incorporated a wholly owned subsidiary, D Limited which is involved in supplying of construction materials like steel, iron, cement, bricks, etc. D Limited elects to choose to prepare its first financial statements for the period from 8th January, 2022 to 31st March, 2022. On 2nd January, 2022, Golden Limited incorporated a new wholly owned subsidiary, E Limited for providing project management consultancy service to its customers or to parent company. On 5th January, 2022, Golden Limited through its subsidiary, E Limited acquired 100% partnership interest in XYZ & Co., partnership firm. E Limited elects to choose to prepare its first financial statements for the period from 2nd January, 2022 to 31st March, 2023 and conducted its Annual General Meeting on 16th August, 2023. On 1st July, 2022, the subsidiary company, D Limited incorporated a new wholly owned subsidiary, F Limited. Golden Limited prepared its standalone financial statements for the year 2021-22 and presented before the Board of Directors of the company on 25th August, 2022 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 2nd September, 2022. Golden Limited prepared its standalone and consolidated financial statements for the year 2022-23 and presented before the Board of Directors of the company on 20th August, 2023 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 26th September, 2023. Question - The Companies Act, 2013 provides that in addition to standalone financial statement, the company shall also prepare consolidated financial statements which shall also be presented before AGM. Accordingly, the consolidated financial statements of Golden Limited for the financial year ended 31st March, 2023 includes: Golden Limited and D Limited Golden Limited, D Limited and E Limited Golden Limited, D Limited, E Limited and XYZ & Co., partnership firm Golden Limited, D Limited, E Limited, F Limited and XYZ & Co., partnership firm None Golden Limited is a listed company which is incorporated in 2013 having its registered office at Delhi and corporate office in Noida. It is registered with an authorised share capital of 20 crore divided into 2 crore equity shares of 10/- each. The paid-up share capital of the company is 10 crore divided into 1 crore equity shares of 10/- each. The company is in construction activities like construction of buildings, roads, etc. On 8th January, 2022, the company incorporated a wholly owned subsidiary, D Limited which is involved in supplying of construction materials like steel, iron, cement, bricks, etc. D Limited elects to choose to prepare its first financial statements for the period from 8th January, 2022 to 31st March, 2022. On 2nd January, 2022, Golden Limited incorporated a new wholly owned subsidiary, E Limited for providing project management consultancy service to its customers or to parent company. On 5th January, 2022, Golden Limited through its subsidiary, E Limited acquired 100% partnership interest in XYZ & Co., partnership firm. E Limited elects to choose to prepare its first financial statements for the period from 2nd January, 2022 to 31st March, 2023 and conducted its Annual General Meeting on 16th August, 2023. On 1st July, 2022, the subsidiary company, D Limited incorporated a new wholly owned subsidiary, F Limited. Golden Limited prepared its standalone financial statements for the year 2021-22 and presented before the Board of Directors of the company on 25th August, 2022 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 2nd September, 2022. Golden Limited prepared its standalone and consolidated financial statements for the year 2022-23 and presented before the Board of Directors of the company on 20th August, 2023 for their approval and the same were adopted by the shareholders in the Annual General Meeting held on 26th September, 2023. Question - Please select which is the correct option/ which is the most correct statement: Golden Limited had given the notice for holding AGM in Mumbai on Monday, 26th September, 2023 at 11.00 A.M. Golden Limited had given the notice for holding AGM in Delhi on Monday, 26th September, 2023 at 11.00 A.M. Golden Limited had given the notice for holding AGM in Noida on Tuesday, 27th September, 2023 at 11.00 A.M. Golden Limited had given the notice for holding AGM in Delhi on Monday, 26th September, 2023 at 8.30 A.M. None Time's up
