Master Test - 04 CA Intermediate Udesh Regular Jan 2025 (Group-01) 01/12/2024

Mark : 100 Time : 180 Mins

Case Scenario 1
XYZ Ltd. was incorporated on April 1, 2023. The Board of Directors, within the required timeframe, appointed Mr. A as
the first auditor of the company on April 20, 2023. Mr. A was tasked with auditing the company’s financial statements for
the financial year 2022-23, and he held office until the conclusion of the first Annual General Meeting (AGM), which was
held on September 30, 2023.
During the AGM, the shareholders decided to appoint Mr. B, a partner in the audit firm MNO LLP, as the new auditor.
MNO LLP is a limited liability partnership incorporated under the LLP Act, 2008. Mr. B and his firm were appointed to
hold office from the conclusion of the 1st AGM until the conclusion of the 6th AGM in 2028.
Five years later, in 2028, the company is considering whether to reappoint Mr. B and MNO LLP for another term. The
shareholders are discussing the provisions of the Companies Act, 2013, and the implications of reappointing the same
auditor or audit firm for multiple terms.
On the basis of above facts and by applying applicable provisions of the Companies Act, 2013 and the applicable Rules
therein, choose the correct answer (one out of four) of the following Multiple Choice Questions (MCQs 1-5, of 2 marks
each) given herein under: -

1. Who was responsible for appointing the first auditor of XYZ Ltd., and within what timeframe should the
appointment have been made?
(2 Marks)
(1) Shareholders, within 60 days of registration of company
(2) Board of Directors, within 30 days of registration of company
(3) Board of Directors, within 60 days of registration of company
(4) Shareholders, within 30 days of registration of company

2. How long can MNO LLP, as an audit firm, hold office as the auditor of XYZ Ltd. according to the Companies Act,
2013?
(2 Marks)
(1) One term of five consecutive years
(2) Two terms of five consecutive years
(3) One term of six consecutive years
(4) Three terms of five consecutive years

3. If XYZ Ltd. wants to reappoint MNO LLP for another term after 2028, what does the Companies Act, 2013,
mandate?
(2 Marks)
(1) MNO LLP can be reappointed for another term of five years.
(2) MNO LLP cannot be reappointed, as they have already served one term.
(3) MNO LLP cannot be reappointed, as they have already served two terms.
(4) MNO LLP can be reappointed, but the tenure must be reduced to three years.
4. What is the maximum tenure for which Mr. A as the first auditor of XYZ Pvt. Ltd., can hold office?
(2 Marks)
(1) From the date of appointment until the conclusion of the first AGM i.e. 30th September 2023
(2) From the date of appointment until the conclusion of the second AGM (in 2024)
(3) From the date of appointment until the conclusion of the third AGM (in 2025)
(4) From the date of registration of company until the conclusion of the first AGM i.e. 30th September 2023

5. By what date the copy of the annual return is to be filed with the Registrar of companies in case of first AGM of
XYZ Ltd.?
(2 Marks)
(1) 29th November 2023
(2) 30th December 2023
(3) 31st January 2024
(4) 29th February 2024

Case Scenario 2
In 2023, Tech Innovations LLP was established as a Limited Liability Partnership under the Limited Liability Partnership
Act, 2008. The LLP was formed with two partners: Alex and Jordan, who contributed equally to the capital. Alex
contributed 5,00,000, while Jordan also contributed 5,00,000. The firm was registered with the Registrar of Companies on
April 1, 2023.
Tech Innovations LLP's operations focused on software development and technology consulting. As per the LLP
agreement, both partners shared profits and losses equally. The LLP agreement also stipulated that any changes in the
partnership, such as the addition of a new partner or transfer of interest, required the consent of both existing partners.

In June 2024, Tech Innovations LLP decided to admit a new partner, Priya, who brought in ` 2,00,000 as her capital
contribution. This change was duly recorded and filed with the Registrar of Companies. Furthermore, the LLP decided to
hold an annual general meeting within six months from the end of the financial year to approve financial statements and
discuss business matters.
On the basis of above facts and by applying applicable provisions of the Limited liability Partnership Act, 2008 and the
applicable Rules therein, choose the correct answer (one out of four) of the following Multiple Choice Questions (MCQs
6-7 of 2 marks each) given herein under:

6. As per the LLP Act, 2008, what is required for admitting a new partner into the LLP?
(2 Marks)
(1) The consent of one existing partner- Only Alex
(2) A majority vote of existing partners- Either Alex or Jordan
(3) The consent of all existing partners- Both Alex and Jordan
(4) Approval from the Registrar of Companies

7. When is Tech Innovations LLP required to hold its annual general meeting?
(2 Marks)
(1) By 30th April, 2024
(2) By 30th June, 2024
(3) By 31st July, 2024
(4) By 30th September, 2024
Case Scenario 3
In 2024, Global Enterprises Ltd., a company specializing in international trade, needed to send an important notice to one
of its clients, Mr. Rajiv Patel, regarding a contractual amendment. According to the company’s internal regulations and
the contract terms, the notice had to be served by post.
On April 15, 2024, the company's legal department prepared the notice and addressed it to Mr. Patel at his registered
address. The notice was properly addressed, prepaid, and sent via registered post with acknowledgment due to ensure the
highest level of confirmation for delivery.
A few days later, on April 20, 2024, the notice was returned with a stamp indicating that it was "not claimed" by Mr.
Patel. The legal department recorded the return of the notice and noted the endorsement.
The company’s legal advisor referred to past case laws for similar scenarios to ensure that the notice was considered
legally served under Section 27 of the General Clauses Act, 1897. They reviewed the following precedents:
United Commercial Bank v. Bhim Sain Makhija: It was noted that merely sending a notice by registered post without the
acknowledgment due did not provide sufficient legal protection for proving service.

Jagdish Singh v. Natthu Singh: This case demonstrated that if a notice sent by registered post was returned with a refusal
endorsement, it was considered served.
Smt. Vandana Gulati v. Gurmeet Singh alias Mangal Singh: It was established that if a notice sent by registered post to a
proper address was returned with an endorsement like "not claimed", it was deemed served unless proven otherwise.
On the basis of above facts and by applying applicable provisions of the General Clauses Act, 1897 and the applicable
Rules therein, choose the correct answer (one out of four) of the following Multiple Choice Questions (MCQs 8-10 of 2
marks each) given herein under:

8. According to Section 27 of the General Clauses Act, 1897, what three conditions must be fulfilled for a service by
post to be deemed effective?
(2 Marks)
(1) Properly addressed, Pre-paid, and Posting by ordinary post
(2) Properly addressed, Pre-paid, and Posting by registered post
(3) Properly addressed, Pre-paid, and Sending by courier
(4) Properly addressed, Pre-paid, and Hand delivery

9. In the case of United Commercial Bank v. Bhim Sain Makhija, why was the presumption of service under
registered post found to be insufficient?
(2 Marks)
(1) Because the notice was sent by ordinary post
(2) Because the notice was sent by registered post but not with acknowledgment due
(3) Because the address was incorrect
(4) Because the recipient did not respond

10. What does the case of Jagdish Singh v. Natthu Singh demonstrate about the service of notice?
(2 Marks)
(1) Notice sent by registered post without return endorsement is invalid
(2) Notice sent by registered post and returned with refusal endorsement is deemed served
(3) Notice sent by ordinary post is deemed served if not returned
(4) Notice served by hand delivery is always valid
Independent case scenarios
11. XYZ Ltd., a manufacturing company, had taken a loan from ABC Bank and registered a charge on its assets on
January 1, 2022. On April 1, 2024, XYZ Ltd. paid off the entire loan to ABC Bank. According to Section 82 of the
Companies Act, 2013, XYZ Ltd. was required to file an intimation with the Registrar of Companies (ROC)
regarding the satisfaction of the charge within 30 days from the date of the payment.
However, due to an oversight, the company did not submit the intimation until July 15, 2024. To rectify this, the
company decided to take advantage of the extended period for intimation provided under the proviso to Section 82
(1), which allows for an extension up to 300 days with the payment of additional fees.
The additional fee for late intimation was `5,000, and the company's compliance officer needed to calculate the total
fee to be paid for the delayed filing.
As per the given facts, examine by how many days XYZ Ltd. was late in submitting the intimation of satisfaction of
charge? What additional fee should the company pay for this delay?
(2 Marks)
(1) 90 days , Fee = 1,000
(2) 76 days , Fee = 5,000
(3) 90 days , Fee = 5,000
(4) 300 days , Fee = 10,000

12. Athlete Rajiv Sharma, a professional tennis player from India, achieved remarkable success by winning a
prestigious international tennis tournament held in Paris, France. As a result of his victory, he received a prize
money of $150,000 from the event organizers. Rajiv was excited about his winnings and planned to use a portion of
the prize money to fund his training and future tournaments abroad.
Rajiv decided to remit $150,000 to his personal account in France to manage his finances and cover his training
expenses. However, before proceeding, he needed to ensure that the remittance complied with the Foreign
Exchange Management Act (FEMA), 1999, specifically concerning the remittance of prize money or sponsorship
of sports activities abroad.
Under FEMA regulations, individuals other than international, national, or state-level sports bodies are subject to
specific guidelines when remitting amounts exceeding $100,000. Rajiv was aware that the amount involved in his
case exceeded this threshold and sought advice on the necessary steps and compliance.
Enumerate in the given instance, according to FEMA regulations, what must Rajiv Sharma do if he wishes to remit
prize money exceeding US $100,000 abroad?
(2 Marks)
(1) Remit the amount directly without any additional requirements.
(2) Obtain approval from Paris Government before remitting the amount
(3) Only provide proof of winning the prize
(4) Require prior approval of Ministry of Human Resource Development (Department of Youth Affairs and
Sports)

13. Kite Sports Academy, a private coaching club, provides coaching for cricket, football and other similar sports. It
coaches sports aspirants pan India. It also conducts various sports events and campaigns, across the country. In
2022, to mark the 25th year of its operation, a cricket tournament (akin to the format of T-20) is being organized by
Kite Sports Academy in Lancashire, England, in the first half of April. The prize money for the ‘winning team’ is
fixed at USD 40,000 whereas in case of ‘runner-up’, it is pegged at USD 11,000. You are required to choose the
correct option from the four given below which signifies the steps to be taken by Kite Sports Academy for
remittance of the prize money of USD 51,000 (i.e. USD 40,000+USD 11,000) to England keeping in view the
relevant provisions of Foreign Exchange Management Act, 1999:
(2 Marks)
(1) For remittance of the prize money of USD 51,000, Kite Sports Academy is required to obtain prior permission
from the Ministry of Human Resource Development (Department of Youth Affairs and Sports).
(2) For remittance of the prize money of USD 51,000, Kite Sports Academy is required to obtain prior permission
from the Reserve Bank of India.
(3) For remittance of the prize money of USD 51,000, Kite Sports Academy is not required to obtain any prior
permission from any authority, whatsoever, and it can proceed to make the remittance.
(4) For remittance of the prize money of USD 51,000, Kite Sports Academy is required to obtain prior permission
from the Ministry of Finance (Department of Economic Affairs)
14. A Ltd. is incorporated on 3rd January, 2023. As per the Companies Act, 2013, what will be the financial year for
the company:
(2 Marks)
(1) 31st March, 2023
(2) 31st December, 2023
(3) 31st March, 2024
(4) 30th September, 2024

15. A charge was created by Cyprus Limited on its office premises to secure a term loan of ` 1 crore availed from ABM
Bank Limited through an instrument of charge executed by both the parties on 16th February, 2023. Inadvertently,
the company could not get the charge registered with the concerned Registrar of Companies (ROC) within the first
statutory period permitted by law and the default was made known to it by the lending banker with a stern warning
to take immediate steps for rectification. The latest date within which the company must register the charge with the
ROC so as to avoid paying ad valorem fees for registration of the charge is:
(2 Marks)
(1) 27th April, 2023
(2) 17th April, 2023
(3) 2nd May, 2023
(4) 16th June 2023
 Descriptive Questions
Question No. 1 is compulsory.
Attempt any four questions out of the remaining five questions.

1(a). New Ltd. is a company in which Old Ltd. is holding 65% of its paid up share capital. One of the shareholder of Old
Ltd. made a charitable trust and donated his 10% shares in Old Ltd. and `50 crore to the trust. He appoints New
Ltd. as the trustee. All the assets of the trust are held in the name of New Ltd. Can a subsidiary hold shares in its
holding company in this way?
(5 Marks)

1(b). The Government of India is holding 51% of the paid-up equity share capital of Surya Ltd. The Audited financial
statements of Surya Ltd. for the financial year 2023-24 were placed at its annual general meeting held on 1st
August, 2024. However, pending the comments of the Comptroller and Auditor General of India (CAG) on the said
accounts the meeting was adjourned without adoption of the accounts. On receipt of CAG comments on the
accounts, the adjourned annual general meeting was held on 29th September, 2024 whereat the accounts were
adopted. Thereafter, Surya Ltd. filed its financial statements relevant to the financial year 2023-24 with the
Registrar of Companies on 20th October, 2024. Examine, with reference to the applicable provisions of the
Companies Act, 2013, whether Surya Ltd. has complied with the statutory requirement regarding filing of accounts
(unadopted and adopted) with the Registrar?
(5 Marks)

1(c). Mr. A, an Indian National desires to obtain Foreign Exchange for the following purposes:
(i) Remittance of US Dollar 50,000 out of winnings on a lottery ticket.
(ii) US Dollar 100,000 for sending a cultural troupe on a tour of U.S.A.
. Advise him whether he can get Foreign Exchange and if so, under what conditions?
(4 Marks)

2(a). What are the powers of Registrar to make entries of satisfaction and release of charges in the absence of any
intimation from the company. Discuss this matter in the light of provisions of the Companies Act, 2013.
(5 Marks)

2(b). What is the mode of service of documents to Registrar or members, as per the provisions of the Companies Act,
2013.
(5 Marks)

2(c). Explain various provisions applicable to rules or bye-laws being made after previous publications as enumerated in
Section-23 of the General Clauses Act, 1897.
(4 Marks)

3(a). Navni Ltd. has accumulated a significant amount in its securities premium account. The company is considering
different ways to utilize these funds. Advise the directors of the company on the application of the securities
premium account as per the provisions of the Companies Act, 2013.
(5 Marks)
3(b). KMN Ltd. scheduled its annual general meeting to be held on 11th March, 2024 at 11:00 A.M. The company has
900 members. On 11th March, 2024 following persons were present by 11:30 A.M.
(1) P1, P2 & P3 shareholders
(2) P4 representing ABC Ltd.
(3) P5 representing DEF Ltd.
(4) P6 & P7 as proxies of the shareholders
(i) Examine with reference to relevant provisions of the Companies Act, 2013, whether quorum was present
in the meeting.
(ii) What will be your answer if P4 representing ABC Ltd., reached in the meeting after 11:30 A.M.?
(iii) In case lack of Quorum, discuss the provisions as applicable for an adjourned meeting in terms of date,
time & place.
(iv) What happens if there is no Quorum in the Adjourned meeting?
(5 Marks)

3(c) Write short note on:

4(a) The Board of Directors of Avni Ltd. requested its Statutory Auditor to accept the assignment of designing
and implementation of suitable financial information system to strengthen the internal control
mechanism of the Company. How will you approach to this proposal, asa Statutory Auditor of Avni
Ltd., taking into account the consequences,if any, of accepting this proposal?
(5 Marks)

4(b) Define the term ‘Body Corporate’ as per the provisions of the Limited Liability Partnership Act, 2008.
(5 Marks)

4(c) Differentiate Mandatory Provision from a Directory Provision. What factors decide whether a
provision is directory or mandatory?
(4 Marks)

5(a) M/s Sulbha LLP was incorporated on 01.09.2022. On 01.01.2023, one partner of a partnership firm
named M/s Sulbha which is registered with Indian Partnership Act, 1932 since 01.01.2000 requested
ROC that as the name of LLP nearly resembles with the name of already registered partnership firm, the
name of LLP should be changed. Explain whether M/s Sulbha LLP is liable to change its name under the
provisions of Limited Liability Act, 2008?
(5 Marks)

5(b) CA. Mudit is a partner in SM & Company (Chartered Accountants) and ML & Company (Chartered Accountants).
SM & Company are statutory auditors of Liberal Ltd. (a listed company) for past ten years as on 31st March, 2027.
Advice under relevant provisions of the Companies Act, 2013, whether ML & Company be appointed as statutory
auditor of Liberal Ltd. during cooling off period (after 31st March, 2027) for SM & Company?

(5 Marks)
5(c) A Ltd. declares a dividend for its shareholders in its AGM held on 27th September, 2024. Referring to provisions
of the General Clauses Act, 1897 and Companies Act, 2013, advice, the dates during which A Ltd. is required to
pay the dividend?
(4 Marks)

6(a) Zorab Garments Limited served a notice of General Meeting upon its members. The notice stated that a resolution
to increase the share capital of the company would be considered at such meeting. Roshni, a shareholder of the
company complained that the amount of the proposed increase was not specified in the notice. Is the notice valid?
(5 Marks)

6(b) Shaltom Ltd., an international corporation headquartered outside Japan, is interested in expanding its investor base
and thus is planning to issue a prospectus for the subscription of its securities to potential investors in India.
However, the company has not yet established a physical place of business within India.
As a consultant for Shaltom Ltd., you have been asked to provide guidance on the legal procedures and compliance
requirements that the company must follow to issue this prospectus in India.
(5 Marks)

6(c) Explain the meaning of term ‘Foreign Exchange’ as per the provisions of the Foreign Exchange Management Act,
1999.
(4 Marks)

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