ca inter suggested answers | Nov 23 Law Paper
Table of Content
ABC Limited issued equity shares worth ₹1,00,000 (10,000 shares of 10 each) on 1st April, 2023 which has been fully subscribed, whereby XYZ Limited holds 3,500 equity shares and PQR Limited holds 2,500 equity shares. Prior to the issue of equity shares, ABC Limited already hold 20% of the equity shares of MNP Limited. Further, XYZ Limited holds 10% of MNP Limited’s equity shares as a trustee. MNP Limited controls the composition of the Board of Directors of XYZ Limited and PQR Limited on 01.07.2023, Examine with reference to the relevant provisions of the Companies Act, 2013 —
(i) Whether ABC Limited is a subsidiary of MNP Limited ?
(i) Whether ABC Limited and XYZ Limited have the right to vote on the Annual General Meeting of MNP Limited held on 30th September, 2023 ?
Answer 1 : (A)
The company Herbal Wellness Products Ltd. was registered in April 2018 with an authorised share capital of ₹ 300 crores divided into 30 crore equity shares of ₹10 each having its registered office at Trivandrum and listed in Bombay Stock Exchange. The company was in compliance of all legal requirements on time. The company was producing health related products such as ayurvedic medicines, medical instrumems, sanitizers, masks, medical soaps ete. The aggregate value of the paid-up share capital of the company was ₹ 200 crores divided into 20 crore equity shares of ₹ 10 each at the end of the financial year 2022-23. The extract of Balance Sheet of the company as on 31st March, 2023 showed the following figures -
| Particulars | Amount (₹) crores |
| Free reserves created out of profits | 200 |
| Securities Premium account | 70 |
| Credit balance of Profit & loss account | 60 |
| Reserves created out of revaluation of assets | 25 |
| Miscellaneous expenditure not written off | 20 |
Turnover of the company during the financial year 2022-23 was ₹700 crores and the net profit calculated in accordance with section 198 of the Companies Act, 2013 with other adjustments as per CSR Rules was ₹ 4 crores.
The Board of Directors of the company consists of the following directors :
CA "R.C Goel" as the Managing Director
"Rudra Mittal” and ‘Pragya’ as independent directors
‘Varun’, ‘Prabodh’, ‘Disha’ and ‘Reshma’ as executive directors
Vineet, Chief Compliance Officer of the company informed the Board on 20th April, 2023 that the company attracts the provisions of section 135 of the Companies Act, 2013 and all the formalities have to be complied with accordingly. Thereafter, on 30thApril, 2023 a CSR Committee was formed consisting of the following members :
CA ‘R.C Goel’, 'Varun’, ‘Prabodh’ and ‘Vineet’ to act and comply to the provisions of Corporate Social Responsibility,
The company proposed a list of activities to spend 4% of the average net profits of the company made during the immediately preceding three financial years in pursuance of its CSR Policy, as under :
(i) The CSR projects for the benefit of employees of the company and their families only.
(ii) A contribution of ₹ 50,000 to a political party under the provisions of section 182 of the Companies Act, 2013.
(iii) A contribution to the PM CARES Fund during Covid pandemic.
(iv) Local activities like promotion of child and women education.
On the basis of above facts and by applying applicable provisions of Companies Act, 2013 and the applicable Rules therein answer the following questions :
(i) On what basis Vineet, Chief Compliance Officer arrived at this conclusion that the company attracts the provisions of section 135 of the Companies Act, 2013, as turnover of the company was only ₹700 crores ?
(ii) Advise the company, how many members are eligible to be part of Committee and what is the criterion ? Whether CSR committee formed was in compliance with the provisions of the Act and Companies (Corporate Social Responsibility Policy) - Rules, 2014 ?
(iii) Whether activities proposed by company were in accordance with provisions of the Act and Companies (Corporate Social responsibility Policy) rules, 2014 ?
Answer 1 : (B)
COMING SOON
Mr. R extended 3 loan to Mr. D with X, Y, and Z as sureties. Each surety executed a bong with varying penalty amounts, X with a penalty of ₹10,000, Y with ₹20,000 and Z with ₹40,000, in the event of Mr. D’s failure to repay the borrowed money to Mr. R. Examine the liabilities of the sureties in accordance with the Indian Contract Act, 1872, when Mr. D defaults to the tune of ₹42,000. Additionally, assess the situation, if there is no contractual arrangement among the sureties.
Answer 1 : (C)
Calculate the date of maturity of the following bill of exchange explaining the relevant rules relating to determination of the date of maturity, as provided in the Negotiable Instruments Act, 1881.
(i) The bill of exchange drawn on 21/06/2023. Date of maturity of a bill payable 100 days after date.
(i) A bill of exchange drawn on 20/04/2023 is payable twenty days after sight and the bill is presented for acceptance on 30/04/2023.
Answer 1 : (D)
