Chapter 9 of 15 - Corporate and Other Laws

Accounts of Companies

17 questionsasked in 11 of 13 attemptsOrder: by topic, latest first

Chapter weightageCh. 8Ch. 10
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May25Sep25
September 20264(a)5 marksNew Scheme

(a)Sunrise Infra Limited, an unlisted public company, maintained its books of account at a branch office in Pune instead of its registered office in Mumbai. The Board of Directors had approved the decision, but the company failed to file Form AOC-5 with the Registrar within seven days. The company also maintained its books in electronic mode using accounting software that allowed editing of entries without preserving an audit trail. During inspection, Director Mr. Karan requested financial information relating to the company's Dubai branch. However, the finance department delayed the submission for more than one month. Further, it was found that the company had preserved vouchers and books of account only for the previous five years.

Later, while preparing the financial statements for F.Y. 2024-25, the auditors observed that the statements were not prepared in compliance with Accounting Standards and certain deviations had not been disclosed. The Board realised that the earlier year's financial statements also contained errors and proposed revising them voluntarily. However, the directors wanted to revise the statements for the previous four financial years without approaching the Tribunal.

The shareholders questioned whether the company had complied with the provisions of the Companies Act, 2013 relating to maintenance of books of account, preservation of records, disclosure requirements, and voluntary revision of financial statements.

Based on the above facts, answer the following questions:

(i)Discuss and evaluate whether Sunrise Infra Limited complied with the provisions relating to maintenance and preservation of books of account under the Companies Act, 2013. (2 Marks)

(ii)Examine whether the company could revise its earlier financial statements without Tribunal approval and whether non-disclosure of accounting standard deviations was proper. (3 Marks)

September 20266(a)5 marksNew Scheme

(a)The Governments of Gujarat and Uttar Pradesh collectively hold 60% of the paid-up Equity Share Capital of Paras Limited. The audited financial statements of Paras Limited for the financial year 2024-25 were presented at its Annual General Meeting convened on 17th August, 2025. 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. Therefore, the company did not file its financial statements with the Registrar of Companies. Afterwards, on receipt of CAG comments on the accounts, the adjourned annual general meeting was held on 20th September, 2025 whereat the accounts were adopted. Thereafter, Paras Limited filed its financial statements relevant to the financial year 2024-25 with the Registrar of Companies on 29th September, 2025.

Examine, with reference to the applicable provisions of the Companies Act, 2013, whether Paras Limited has complied with the statutory requirements regarding filing of accounts with the Registrar.

May 20261(b)5 marksNew Scheme

(b)Tarun Synthetics Ltd. in its financial statement for the year ended on 31st March, 2024 failed to disclose a contingent liability pertaining to a suit filed against the company amounting to ₹ 2.50 crore for the breach of a contract. In April 2025, the competent Court decided the matter against the company, as a result the company was required to pay the said amount to the decree-holder. The company decided to prefer an appeal against such order. The company felt that non-disclosure of the contingent liability affected the true and fair view of its state of affairs. So, the company voluntarily decided to revise the financial statement and the Board report for the year ended on 31st March, 2024 and held a Board Meeting on 15th May, 2025 to this effect.

In light of the above facts answer the following referring to the provisions of the Companies Act, 2013:

(i)Whether the company can voluntary revise the financial statements and the Board report?

(ii)State the particulars/ details to be stated in the application for making such voluntary revision of financial statements under Rule 77 of the National Law Tribunal Rules, 2016. (5 Marks)

January 20266(b)5 marksNew Scheme

(b)RMP Private Limited is an unlisted company having:

•Paid-up share capital of ₹ 6 crore, and

•Annual turnover of ₹ 90 crore.

The company is not required to prepare its financial statements as per the Companies (Indian Accounting Standards) Rules, 2015.

The company filed its financial statements for the financial year 2024-25 in Form AOC-4 (normal form) instead of Form AOC-4 XBRL.

State the classes of companies required to file financial statements and documents in XBRL format under Section 137 of the Companies Act, 2013 and examine whether RMP Private Limited has complied with the applicable legal provisions. (5 Marks)

September 20244(a)5 marksNew Scheme

(a)XYZ Limited is a company having a paid up equity share capital of ₹ 75 crore. Though it was performing well in the recent years it suffered losses in the first and second quarter of the financial year 2023-2024. In order to sustain its image, the Board of Directors declared an interim dividend at the rate of 30 percent on the paid-up equity share capital on 4/10/2023. The following are the additional information extracted from the books of account for the past 5 Financial Years:

Financial year ending 31st MarchRate of Dividend declared
2019 2020 2021 2022 202320% 15% 15% 15% 30%
Examining the provisions of the Companies Act, 2013, decide the validity of the Board's declaration of 30% interim dividend.(5 Marks)
September 20245(a)5 marksNew Scheme

(a)Sanjana joined a company named as Designers Cloths Ltd. as an Independent Director. In order to know more about the company, she wanted to inspect the books of account and minutes books of the Board Meetings held during the previous three years.

The company is keeping the books of account and other records at its Registered Office, which is at Mumbai whereas Sanjana resides in Kolkata. Therefore, through power of attorney, Sanjana authorised her friend Avantika, who is a Chartered Accountant and does practice in Mumbai, to make an inspection of the books of accounts and minutes books of the meetings of the Board.

Giving the relevant provisions of the Companies Act, 2013 and its Rules made thereunder, examine, whether Avantika can make inspection on behalf of Sanjana. (5 Marks)

May 20241(b)5 marksNew Scheme

(b)BBQ Ltd., with its registered office in Hyderabad, has two branch offices, one located in Delhi and the other in London. The accounting transactions of the branches are recorded and all books of account are maintained in the branches. The branch accountant of the Delhi branch sent monthly and the branch accountant of London sent quarterly summarized trial balance, profits and loss account and balance sheet to the Hyderabad office. One of the assistants of the audit team, Mr. Naveen, raised the issue that the branches of the company maintain its books and records at branches, so it defaults on not maintaining the proper books of account at the registered office. Mr. Naveen further objected to the fact that the London branch sent their summarised returns on a quarterly basis instead of a monthly basis. You are requested to analyse and decide the validity of both the objections of Mr. Naveen relating to the place of maintaining the books of account and sending summarised returns thereof to the registered office by the branch offices of the company referring to the provisions of the Companies Act, 2013. (5 Marks)

May 20246(a) OR5 marksNew Scheme

(a)The Income Tax Authority (the statutory body) has gathered some information and is of the view that there has been a manipulation of accounts of FGH Ltd. reflecting an incorrect financial position of the company. The statutory body intends to get the accounts reopened to reflect correct financial position of the company. In light of the Companies Act, 2013 elucidate.

(i)the statutory provisions governing the issue of re-opening of accounts by the Income Tax Authority.

(ii)the voluntary revision of financial statements or board's report by the directors.

(iii)For how many preceding financial years the board of directors may revise the financial statements? (5 Marks)

November 20234(c)4 marksOld Scheme

(c)WEE Remedies Ltd. incorporated on 26th November, 1995 with a paid-up capital of ₹ 25 crore. According to financial results of the company as on 31.3.2022 net worth of the company was ₹ 120 crore and turnover for the year 2021-22 was ₹ 350 crore. The company proposed to accept the deposits as on 1st November, 2022, which would be due for repayment on 30th September, 2027 from the public for expansion and redevelopment programs of company. Besides that, company accepts a loan of ₹ 1.5 crore from Mr. P N Seth (Director) and the loan was expected to be repaid after twenty four months. Company in its books of account, records the receipt as a loan under non- current liabilities. At the time of advancing loan, Mr. Seth affirms in writing that such amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and complete details of such loan transaction is furnished in the boards' report.

On the basis of above facts answer the following questions:

(i)Whether company was eligible to accept deposit from public? What is the criteria for acceptance of deposit and tenure for which deposit can be accepted? Whether the tenure decided by company was in accordance with provisions of the Companies Act, 2013?

(ii)With reference to the loan advanced by Mr. Seth to company, state whether the same is to be classified as a deposit or not? (4 Marks)

November 20223(b)5 marksOld Scheme

(b)The Government of Rajasthan and Haryana are jointly holding 58% of the paid-up Equity Share Capital of Moon Ltd. The Audited financial statements of Moon Ltd. for the financial year 2021-22 were placed at its Annual General Meeting held on 31st August, 2022. 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. Therefore, the company did not filed its financial statements to the Registrar, Afterwards, on receipt of CAG comments on the accounts, the adjourned annual general meeting was held on 5th October, 2022 whereat the accounts were adopted. Thereafter, Moon Ltd. filed its financial statements relevant to the financial year 2021-22 with the Registrar of Companies on 25th October, 2022.

Examine, with reference to the applicable provisions of the Companies Act, 2013, whether, Moon Ltd. has complied with the statutory requirement regarding filing of accounts with the Registrar. (5 Marks)

December 20214(a)6 marksOld SchemeLaw changed
Law changed: Mandatory audit trail in books of account: By the Companies (Accounts) Amendment Rules, 2021 read with subsequent notifications (effective 1 April 2023), every company using accounting software for maintaining books of account must use only software with an audit trail feature that records an audit log of each and every transaction, creating an edit log with dates and ensuring that the audit trail cannot be disabled.

(a)(i) Diya Limited, incorporated under the provisions of the Companies Act, 2013, has two subsidiaries - Jai Limited and Vijay Limited. All the three companies have prepared their financial statements for the year ended 31st March, 2021. Examining the provisions of the Companies Act, 2013, explain in what manner the subsidiaries - Jai Limited and Vijay Limited shall prepare their Balance Sheet and Statement of Profit & Loss? (3 Marks)

(ii)The Companies Act, 2013 has prescribed an additional duty on the Board of directors to include in the Board’s Report a ‘Directors’ Responsibility Statement’. Briefly explain any three matters to be furnished in the said statement. (3 Marks)

January 20255(a)5 marksNew Scheme

(a)Quick Money Limited attracts the provisions of section 135 of the Companies Act, 2013 and it has minimum average obligation to spend Corporate Social Responsibility (CSR) amount of ₹ 15 crore during each of the preceding five years. In this connection, the Board of Directors of the company needs your expert views on the following matters:

(i)What is the meaning of "impact assessment"?

(ii)Whether impact assessment is required to be taken by all the companies?

(iii)Who can conduct impact assessment?

November 20231(b)6 marksOld Scheme

(b)The company Herbal Wellness Products Ltd. was registered in April 2018 with an authorised share capital of ₹ 300 crore 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 instruments, sanitizers, masks, medical soaps etc. The aggregate value of the paid-up share capital of the company was ₹ 200 crore 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 -

ParticularsAmount
(₹) crore
Free reserves created out of profits200
Securities Premium Account70
Credit balance of Profit & Loss account60
Reserves created out of revaluation of assets25
Miscellaneous expenditure not written off20

Turnover of the company during the financial year 2022-23 was ₹ 700 crore and the net profit calculated in accordance with section 198 of the Companies Act, 2013, with other adjustments as per CSR Rules was ₹ 4 crore.

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 30th April, 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 the 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 crore?

(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? (6 Marks)

May 20233(a)6 marksOld Scheme

(a)The aggregate value of the paid-up share capital of ABC Security Services, was ₹ 200 crore divided into 20 crore equity shares of ₹ 10/- each at the end of the Financial Year 2021-22 having its registered office at Mumbai. This company had been registered with an authorized share capital of ₹ 300 crore divided into 30 crore equity shares of ₹ 10/- each. The extract of Balance Sheet of the company as on 31st March, 2022 showed the following figures:

ParticularsAmount (₹ in crore)
Authorized share capital Paid -up share capital Free reserves created out of profits Securities Premium account Credit balance of Profit & Loss account Reserves created out of revaluation of assets Miscellaneous expenditure not written off300 200 200 80 50 25 10

Turnover of the company during the Financial Year 2021-22 was ₹ 800 crore and the net profit calculated in accordance with section 198 of the Companies Act, 2013 with other adjustments as per CSR Rules was ₹ 4 crore only.

Praveen, Company Secretary of the company advised 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 30th April, 2022 a CSR committee was formed to comply with the provisions of Corporate Social Responsibility.

The Board of Directors of the company constituted of the following persons as its directors:

Mohan SinghManaging Director
Rohit and BhavanaIndependent Directors
Venkatesh, Isha, Mohit and MuskaanDirectors

On the basis of above facts and by applying applicable provisions of Companies Act, 2013, answer the following:

(i)Is the contention of Praveen, Company Secretary of the company that the company attracts the provisions of section 135 of the Companies Act, 2013 and is required to form a CSR committee is correct? Support your answer with the applicable provision and the required calculation.

(ii)It was decided that Mohan Singh, Venkatesh, Isha and Bhavna will be the members of CSR committee. Is this decision correct in the light of provisions of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014? (6 Marks)

May 20221(b)6 marksOld Scheme
(b) (i)SKIP Limited (the Company) was incorporated on 01.04.2019. The balances
extracted from its audited financial statement are as given below:
Financial Year (FY)Net Profit before taxNet Profit after tax (Ignore
Income Tax computation)
2019-20₹ 5.00 crore₹ 3.75 crore
2020-21₹ 7.00 crore₹ 5.25 crore

The Company proposes to allocate the minimum required amount for CSR Activities to be undertaken during FY 2021-22, if it is mandatory. You are requested to advice the Company in this regard and compute the minimum amount to be allocated, if so required, taking into account the relevant provisions of the Companies Act, 2013.

(3 Marks)

(ii)SKS Limited issued 8% ₹ 1,50,000; Redeemable Preference Shares of ₹ 100 each in the month of May, 2010, which are liable to be redeemed within a period of 10 years. Due to the Covid-19 pandemic, the Company is neither in a position to redeem the preference shares nor to pay dividend in accordance with the terms of issue. The Company with the consent of Redeemable Preference Shareholders of 70% in value, made a petition to the Tribunal [NCLT] to accord approval to issue further redeemable preference shares equal to the amount due. Will the petition be approved by the Tribunal in the light of the provisions of the Companies Act, 2013?

Can the company include the dividend unpaid in the above issue of redeemable preference shares? (3 Marks)

May 20222(b)4 marksOld Scheme

(b)XYZ Ltd. received a communication from Central Government for preparation of periodical financial results and complete audit or limited review of such periodical financial results. The Board of Directors have raised an objection on the ground that as it is an unlisted company, periodical financial results need not to be prepared. Examine, referring the provisions of the Companies Act, 2013, in this regard. (4 Marks)

January 20264(a)5 marksNew Scheme

(a)The Board of Directors of XYZ Petrochemicals Limited consists of Mr. R (Managing Director), Mr. N (Director), Mr. P (Director), Mr. A (Chairperson), Mr. D (Chief Financial Officer, not a director) and Mr. C (Company Secretary). The Board as a policy does not authorize the chairperson of the company to sign the financial statements. The Profit and Loss Account and Balance Sheet of the company were signed by Mr. N, Mr. P and Mr. A. Examine whether the authentication of financial statements of the company was in accordance with the provisions of the Companies Act, 2013.

What would be your answer in case the company is a One Person Company (OPC) and has only one Director, who has authenticated the Balance Sheet and Statement of Profit & Loss and the Board's Report? (5 Marks)