Taxmann's Governance Risk Management Compliances & Ethics (GRMCE) | CRACKER

Contents

PAGE

Chapter-wise Marks Distribution

I-7

Previous Exams Trend Analysis (June 2019 Onwards) (New Syllabus) Chapter-wise Comparison with Study Material Changes in Questions Due to Amendments

I-9 I-17 I-19

Chapter 1 Conceptual Framework of Corporate Governance

1.1

Chapter 2 Legislative Framework of Corporate Governance In India

2.1

Chapter 3 Board Effectiveness

3.1

Chapter 4 Board Processes through Secretarial Standards

4.1

Chapter 5 Board Committees

5.1

Chapter 6 Corporate Policies and Disclosures

6.1

Chapter 7 Accounting and Audit Related Issues, Related Party Transactions and Vigil Mechanism

7.1

I-5

3 4 . % 4 . / #

I-6

Chapter 8 Corporate Governance and Shareholders Rights CHAPTER 9 Corporate Governance and other Stakeholders

PAGE

8.1 9.1

Chapter 10 Governance and Compliance Risk

10.1

Chapter 11 Corporate Governance Forums

11.1

Chapter 12 Risk Management

12.1

Chapter 13 Internal Control

13.1

Chapter 14 Reporting

14.1

Chapter 15 Ethics and Business

15.1

Chapter 16 CSR and Sustainability

16.1

Chapter 17 Anti-Corruption and Anti-Bribery Laws in India

17.1

Solved Paper - Dec. 2020 (New Syllabus)

P.1

Solved Paper - June 2021 (New Syllabus)

P.26

Solved Paper - Dec. 2021 (New Syllabus)

P.42

Solved Paper - June 2022 (New Syllabus)

P.55

7 CHAPTER

ACCOUNTING AND AUDIT RELATED ISSUES, RELATED PARTY TRANSACTIONS AND VIGIL MECHANISM

INTERNAL AUDIT Q1. P Pvt. Ltd. was incorporated under the Companies Act, 1956 on 3rd October, 2011. The Authorised Share Capital of the Company is ` 75 crores. The present Paid-up Share Capital of the Company is ` 60 crore.

The turnover of the company for financial year 2017-18 was ` 150 crores and because of good overseas marketability of the company’s product, the turnover of the company for the year ended 31st March, 2019 increased to ` 210 crores.

Based on the facts in the above case, answer the following questions: i. Whether internal audit is compulsory for the Private Limited?

TAXMANN®

The Secretarial Auditor of the company advised that the company should have internal audit in place, but the Managing Director of the company argued that since it is a private company, so it is not required.

ii. In the above case if the company had been an Unlisted Public Limited and Turnover for year ended 31st March, 2019 would be ` 190 crore, what would have been your answer? iii. Can Company Secretary be appointed as Internal Auditor in an Unlisted Public Company where he is already appointed as Key Managerial Personnel?

[December 2019, 2 Marks each] Y R NO AT PI D MU OA CL EA T N HA R T VE I I T WR N I DPN AYA R EE R T V N EI O P P A O T D E R I U Q E R E B L L A H S G N I W O L L O F E H T G N I V A H

i

S !

Ans.

per section 138 of the Companies Act, 2013 (c) of The Companies (Accounts) Rules, 2014

E R P E H T G N I R U D E R O M R O S E E P U R E R O R R C O D E R D R NA UE HY OL A WI TC FN O A N RI E F VG ON NI RD UE 4C

a

Rule 13(1)

-

7.1

b

C I L B U P D E T S I L HN T I WU Y DR AE EV R E

G N I V A H Y N A P M O C

LY E YD A E H N N E I R T R C AI A P N T G T U E A A A N Q H NE I E ER T R I R F R U G OE CO D N I B ML M L I R E B L RA R U UR OH O D

POR SS M E RSA E E R R E OE EA R O Y P P O S E M L KUA UY S R N R L I E R A C A EI E E O N BR R P C S ON U E MOA RA R N R E C I C O N F P E EF RDG I U R F VG EN R O I S R F R I G N E C Y I R NDD

N E T D R I O Y UC N E O R T R WH R C E R EC T F O O O O I I R E W F D E R D R TP

R NP U FR E E O F O R A A EL O BOH D LE G

T H S A R N Y R A T N T G A T O N U I I L G I N S R A D P HE S N I O Y E E R I AI N T PR OL CC AEU N N EUI A C W D OX I EA DDN L TC N R GEE GEA FN I A M S O A N N M HF T N I I I SG RN I T N D D I O T N E I I F NT NF PI O VF O D O A A UE U P OG T T TP T T NN S S I DC N N T T T A RI D I I I E S U U UE A O O R O N / /P 4 0P P C T I

c

-

b

Rule 13(1)

ii As per section 138 of the Companies Act, 2013 (b) of The Companies (Accounts) Rules, 2014

a

LY A N I C A NT AA NE I F R CO I M L B UR POR S A RE E OE Y SPL KUA NRI AEC N BR OA MR N I OCF RDG F EN SR I G DD NN E I C WUE OHR REP R N E OO H BG T RN G OI N SDI NER AEU OCD X L EE GS M NN I I T D OF I NT O AU T T T S IN T T I S U O NP /I

T V 0 0 NR AO HF T Y RR E O HT GA I D H N SA I

M D T S ,I T I T V

0 0 E H H T C

FR R O A O T R-I E D VTU OS A N L R A U D N T E R ED E HN T T N EI E RN S A A A CET TYI N E N HO ET P S E RP R OA PF O EET HR

T D OT R, NC ) d TAXMANN®

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

7.2

`

NR AO T HI T D RU E A HL GA I N H R E ST I N DI T E ,H T T T V N 0O I 0P P FA O O LT A S T I D P E AE CN PY UN A DP I A M PO EC HE T H T E E S C A N CE TH N S EE S R E O R R PC EY HF T T I NF )

RH OC T U I S D UR AO LT A N NA RT E N T U N O I CD

NC AA R A TO S O" CE AH RT OY TB N D AE T D N I UC OE CD CE AB DY EA R M E T R S A A HL CA N AO ES I BS RE F E HO R T I P E R LE L A H HT SO

`

iii As per Section 138 of the Companies Act, 2013

E H T F O E E Y O L P M E N A E B T O N Y A M R O Y A M R O T I D U A L A N R E T N I E H T T A Y HN T A SP E M T A O T C S

Explanation to Rule 13 of The Companies (Accounts) Rules, 2014

L YA EN +R E ST A N DI EN T A N S I A O PD PE AT N SI I O OP HP WA E YB R A N T A E R C C Y EN 3A YP NM AO PC ME OH #T

ENY I N HL T A E P E N VN M OO O BS ARC E EEH H0T L T A F FI O R O E R W G O AI EN T I D V AU N-A )

Q2. Apart from Statutory Audit, for some class of companies, Internal Audit is also mandatory. Which companies are required to have Internal Audit as per the provisions of the Companies Act, 2013?

[June 2019, 5 Marks]

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

TS TOY N TN EOD A MCR P A TAO M N R I O O"C O PTEF PNH O A AT TS YN E YS R BS U OO A T L CDC A DCER D I NAC O F DADE E S AMR D E E E E I E R T T H B I R T V A Y I RH T AC OC F A SAMD E SN DEA I BLA V ORAS RENN PHOI O I T I T S E C S E N LF L U A O F HR E SP H ORT HE F HO WT T ROI OHD T U I CA D UL US A ARN LO R A E W NTT RNI N O E AT L E T T CB N N I UN NUDE AONV C COI FA O CG Y N A P M O C D E T S I L Y R E V %

n G N I V A H Y N A P M O C C I L B U P D E T S I L N U Y R E V %

E R O M R O S E E P U R E R O R C R O R

FA O E Y RL E A VI OC NN RA N UI 4F

MANDATORY ROTATION OF AUDITORS

Q3. M Pvt. Ltd. was registered in the year 2001 as a Private Limited Company and continuing with the same status. It is having a paid-up share capital of ` 65 crore as on 31st March, 2019. The present company’s auditor, X, Chartered Accountant, (a Proprietor Firm) who was appointed as auditor of the company in the year 2014. The term of the said auditor is going to expire and company wants to re-appoint the same person, since he is having well acquaintance with the company's officials and its working.

Based on the above facts, answer the following questions :

i. Whether X can be reappointed as Statutory Auditor of the Company?

[December 2019, 1 Mark]

ii. In the above case if, instead of the Individual Person as an auditor, the

TAXMANN®

G N I D E C E R P E H T G N I R U D

LF A O I C T N NI AO NP I F Y CN I L A B UT PA E RR OO S KM NR AO

R BSA E MEY E OP L RU A F I SRC E G N R NO A I N WRI OCF R G R N I O D B E G RN C OI E SDR NEP AEE OCH X L T E GS G NN N I I D OR I NT U AU D T T S IE T T M S U NT I /I

E R O M R O S E E P U R E R O R C R O R

FA O E Y RL E A VI OC NN RA N UI 4F

F O T N I O P Y N A T A E R O M R O R SA E E EY PL UA RI C EN R OA RI N C F G N I FD O E SC T I E S R OP PE EH DT GG NN I I D R NU AD T S E T M U I /T n G N I V A H Y N A P M O C E T A V I R P Y R E V %

LF A O I C T N NI AO NP I F Y CN I L A B UT PA E RR OO S KMR NRO AO

R BSA E MEY E OP L RU A F I SRC E G N R NO A I N WRI OCF R G R N I O D B E G RN C OI E SDR NEP AEE OCH X L T E GS G NN N I I D OR I NT U AU D T T S IE T T M S U NT I /I

G N I D E C E R P E H T G N I R U D

E R P E H T G N I R U D E R O M R O S E E P U R E R O R C

R FO O

LR A A T E I Y P AL A CI EC R N A A HN SF I PG UN I DD I A E 0C

-

with Rule 13 of the

Ans. Section 138 of the Companies Act, 2013 Companies (Accounts) Rules, 2014

7.3

S E E P U R F O L H A T I T I W P A D A C E ET

R R N A I HO SP PP UA E DR I A R PO GT NN I I V O AP HP SA E T I O N N AL PL A MH OS CE DR EO T M I MR IO L EE T R A O VR I C R PY T LF L I !

F Ans.

N A H T E R O M R O F R O T I D U A S A L A U D I V I D N I N !

N A H T E R O M R O F R O T I D U A S A M R I F T I D U A N !

EE VM I T A U CS E EH S NT ON CI

RM EO VT R I IE F D T FU O S AH I MS RA F E TO T N SNO I E H I T DML E T EN T IP E O M L PO P PC MA O E CEH SRT R A OM HF O OEF R L HB S WI R GA RL I E OE T Y I EE D UBI V AO TF LN R A O UL LF DA Y I HN V I SA D SP NR I M A NE O !Y C

R EO R OF R MO SI T I YD NU A! PY MR O OT CU T EA HT T F3 O S LA A T D I E P T AN CI O EP R P A HA SE PB UT DO I N A PN EA HC T 8 S A R ES

A M CER TRE O N T R E# D S N E O R P C E E HNS T AE H HT NT ) i As per Section 139(2) of the Companies Act, 2013 of the Companies (Audit and Auditors) Rules, 2014

H T I W D A E R

S E E P U R F O L A T I P A C ET

R N A I HO SP PP UA E DR I A R PO GT NN I I V O AP HP SA E T I O N N AL PL A MH OS CE DR EO T M I MR IO L EE T R A O VR I C R PY T LF L I !

F

N A H T E R O M R O F R O T I D U A S A L A U D I V I D N I N !

E R O M R O F R O T I D U A S A M R I F T I D U A N !

S ER L B A I E G Y I L E E V EF I BR TO O F NY LN L A A HP SM MO RC E E T M SA T I S DE EH M T T E R NE L I P T RH MO C T OI U CD S SUF A HAO S N HAO T CN I I T H EL E WMP TM MN IO RO I C F P E TP I H AT D U AEM R RO NO R !F F

MM RR I I F F TT I I D UD AU OA R NE TH N T EO ME TH N T I O O PT PS AR FE O N T ER T A A DP ER HO T R NE ON SR T A A TP A HN T RO E HM T M R UO FC DA EG DN I V I OV RA 0H

Rule 5

ii As per Section 139(2) of the Companies Act, 2013 of the Companies (Audit and Auditors) Rules, 2014:

than two terms of five conse-

b.

one term of five conse-

a

two terms of five conse-

b

one term of five conse-

a

Rule 5(b)

Cooling off period

TAXMANN®

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

7.4

company would have appointed any Firm of Chartered Accountants, and now the tenure of the said firm is expiring, whether this firm is eligible for reappointment?

[December 2019, 2 Marks]

iii. In the given case, if the paid-up capital of the company is ` 5 crore and having cash credit limit and term loan facility from a bank to the tune of ` 55 crore, what would have been your answer?

[December 2019, 2 Marks]

cutive years

cutive years

Conclusion

`

cutive years

cutive years.

Cooling off period

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

GE NM I A D ES CE EH R PT F YO L E T R A O I T D I ED U MA M IS YA ND AE T PN

S MI R OOA CPE P Y AA E NEV I I DBF LF EL R AO I H P D XSO I E R R SA E A P HEA Y E L R R A O UI F NCY ENN A T NA EI P S OFM E HH O WT C

TN O O NT I LL E L I WP M SO T N C AE T H N T UN OO CS CR !A DE EY R E E V T I R F A R HO F #T FN O E M MT RN I I F O EP HP T A E ER S A E CH TT R N O EF S M E ER L R E PBT I G EI E HL H E T T EF NB O )

D N I K Y N A F O Y T R E P O R P F O G N I S A E ,

S E C I V R E S Y N A F O G N I R E D N E R R O G N I L I A V !

e

S L A I R E T A M S D O O G F O E L A S R O E S A H C R U P R O F T N E G A YY T NR AE FP O O R TP N ER MO S TE N I C O I V PR PE !S

f

E H T N I T I F O R P Y FN O A EP CM AO L P C RE T OA I EC CO I F S F S O A YR NO AY N OA T P TM N EO MC TY N R I A O I PD I PS AB SU

S Y T S R T I A PY N DA EP T A M L E O 2C

g

F O E R E H T S E V I T A V I R E D R O S E I T I R U C E S Y N A F O N O I T P I R C S B U S E HY T N GA NP I T M I R O WC RE E H DT NF 5O

d

D N I K Y N A F O Y T R E P O R P G N I Y U B R O F O G N I S O P S I D E S I W R E H T O R O G N I L L E 3

c

S L A I R E T A M R O S D O O G Y N A F O Y L P P U S R O E S A H C R U P E L A 3

b

`

`

TAXMANN®

EEL O LT HT HA T T HC FSE HO T YP I NS G WN AE I TT P R P H EEMT CEOI XMCW E O Y TANT T A R DA HAE T N P SOBD I E I R T E DU C T I A LSL V OOEE R S RE PR PR A E ABH T YYI BAW NMT ESN VAE I SM G NE SO R IG T OI N T DA C R ENR O R A I R $CO H FCT O U C DSA R ROT T A T N OC O "E C J EB Y HU N T A FSO D O N T TA N N I D ER R S E NAT OON C"E a

T FE O E O CI

N N LI N A SA SE T I P RRC AEOY CVRN ECA EW P R A O M HH O S F C EO PR E UO KH RN T DC I A AS B P E R G AO NFMR I O V OC ATR I F HM Y SL II T I LF YDI NLCO AOAS PHFT I S G ME M N R

I OH I R L CT W O DI T E OL R D O HE HR U T H T OS A ENBE S S I R S H A HT I A T CI T S TWHEA N Y H

8 EE N T S A T I E GN R EPNI PR MD IO OO P ER EP CE HC A T C E XE HE N T R )

iii

7.5

Conclusion

`

`

RELATED PARTY TRANSACTIONS

Q4. Answer the following in brief; Briefly explain the role of due diligence report in helping to curb occurrence of related party transactions.

[December 2016, 2 Marks] Ans. Section 188(1) of Companies Act, 2013

E C N A T R O P M I N W O S T I S A H S N O I T C A S N A R T H C U S F O T R O P E 2 E C N E G I L I $ E U $ E C N E (

LDD MD RA E N I OA T T A RG N A F S ELT E U T SR I C O NH M PII T OT R I I L T T A WH C D L L ATG L O E R S I H NOL WS APHE G E R EI R T VH R YEHAT T CL DHN R N A D I U A L PEO T U G R I HO DI L E SH ED C T A EHSA S L C UI E E D I R D H N N G WA A O NK Y PE I ES B RENMB USOOS I C C T D N C L EO FU AH I O T OST C N MHA A ES R ESR E N T T O S E F A L T Y E R A T S T R I I E T SMR I E HA T TMA H 4T R OO TG PCMS N ET EI I D R R Y D E E F EUS T I C! C ONE I N P FP EG O O S GN R I T P I S L I R C E D I R LF I L L C EUA I N C L UC OO OC $O P T

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

7.6

E H T M O R F E C N A R A E L C E R P A E R I U Q E R D L U O W

E R U T A N N I A T R E CE

FT E O T SI NM OM I T O C C AT S I ND AU R A T

Q5. Under the Energy Department, Govt. of Tamil Nadu, three Companies as Government Company were incorporated as below: A Ltd. for Generation of Electricity B Ltd. for Transmission of Electricity C Ltd. for Distribution of Electricity Further, three subsidiaries namely X Ltd., Y Ltd. and Z Ltd. were incorporated as wholly owned subsidiary companies of C Ltd. C Ltd. purchases the Power (Electricity) from A Ltd. and sell all Power to subsidiary Companies.

Subsidiary Company through B Ltd. distributes the Power in the State.

TAXMANN®

Apart from that, C Ltd. also purchases cables from manufacturer and sells it to Subsidiary Companies with margin of 5% on sale price. In the power supply, C Ltd. also charge 0.05 paisa per unit as service charge from Subsidiary Companies.

During the Audit, Auditors raised the question that there are lot of related party transactions and directors and members are same in all the Companies. Further, Chairman is also common. Neither the Board nor the Members of the Company approved any transaction which comes under the definition of Related Party Transaction. The Company Secretary replied that the transactions are preapproved by Energy Department, Govt. of Tamil Nadu but Auditor is dissatisfied with this reply.

In such situation, check the validity of the transactions between related parties.

[December 2019, 5 Marks]

RF MEI V

EE

MW

O (T

E CT Y !O TT V R S C A E N !P I A N S D C A E EP I S T N R AAME L OB PE R #M MS OI EE #EHM T EHF Y EO HR T T R E FH A P O

W D

E E

T T O A L VNE O NTIR T O ON C E I R T LEA S C L EA F S S HO R FS E E O B YE ONR M WAH TPTE OM OMS SOI E I CVR V OEOO R RH PM PT R RFRO E E POP R SE

S !BA

TO YTD I T NCN D !A UT A SD !P PE E E CTMI EX R CONI HE A !C U T P Q

F SY EN R M

E O R A I N E OS I K D L A #I I A A VTPSEDT OCMBHRE R!OUTAB S F O PS# T DO " PI E S E E AN EN U H

M H EATW T HPFO F S T MO R Y OE O L L N E# LB R OI OA I VM U E HT QHNWCOE R E ETI OSS PM R TOP FTI E SOCDTAH N ENOET O SASH F I I N O T Y T V I C L S A ANONOT A R O T V S PI I NT O DP MR H C AE EMT IP L R R O S T R P CR N U A I REGO YE F A T NFT E S PR R I RRI T D A E E SNL PA DCM I OO N H OL ET I DE UT E ET CAD PH T N T A A I EE5T S L T MN E E E V A R

AWT MR O S

T LOT E L B S #ABA !

A

Ans. Following are the legal provisions of Related party transactions:-

-

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

EN HO T E R A S N O TI C T C !A SS E N I A N AR T PE

S MH S E OTN #ES I R EE U HH B T F FWO O DE S ER R

I

U U Q O E C NRY OTR O I A T NN C I EI SD S R DO FR O N RAI UOS O"S I F EA OHB ST I H FT V OOG RLN PA E V L RO E S PRM P SPR !A A

N O I T C E S O T BY UL SP OP T A OT SO I V N OL RA L PH DS N O C E S DT NC A! TS S E R I I F N EA HP T M O # E H T F O

N O I T C E S O T a

T Y C R E S T PNI SI N E R DI NEM I N E OI V I YT T A NN R AET P S M I M N

OEIT CSMN O DE DH AM ET T S NEN I L AHR AHTE NTFV AROO HEL' T HAE RTVT O O E A RT H P S 3 T T P O

N A

L A YE R D NME T A N E N PGI E A # MNT A B OR D O CR E TASN N A R ESH E T C MC TN I NAF O RRI T C E N EE VO VH OC OT 'F BF !O AO

b

O T S T

N Y EN MA EP GM NO A# R R T A N E S M T C N AR R E T V N OO C' ER HE T H T EO R E Y HN WA H YT NI AW PT MI OY #B O TT N N EI MD NE R RE E T VN OE 'E !B

D E R E T N E S A H Y N A P M O C T N E M N R E V O ' A G N I E B S N D T O I ,T C #A S EN S A A R CT SG I H N I T W NO ) L L O F E H T O T N I S E I N A P M O C T N E M NY RN E VA OP 'M O LC L A T N SE E M I N N AR PE MV OO C' YA R F A O I D S I E S I R BA UI SD I OS T B RU E S WE OR PA FY O E H ET L A S 3A

iii

TY N EN MA NP RM E O VC OT 'N GE NM I N E R BE SV E O I ' R A

I

D D I ST B, U S" H DG EU NO WR OH YT L R L E O HW WO P

E D T T ,U :B I R DT NS AI D D S T E ,I N 9A DP T M ,O 8C

iv

Y R A I D I S B U 3 S T I O T E L A S D N A R E R U T C S AE F I UN NA AP MM O AC T MN OE RM F N SR E L E B V AO C' F O S E EI S N A A HP CM R UO 0C

v

M O C Y R A I D I S B U 3 S T I N O T I N U R E P E S I A PS I E N

A TP A M SO E C GT R N A HE CM EN CR I E V V R O E S ' F O S E YI VN EA ,P

SEY

T HR MT A RFP A O TLD A A E T VA EO R L RE A SPR NPE OAH I ET T HD C ATN S RA NE AHD R TE I T R I EEU HNQ T SE TS R A E S HN I T I S Y GU N NB A I MFP UOM SS EO S RC A UE EO H S T C D A FL I YO CR A TA S V N R NE EI E S DBB E R R MD POE L U EM EH O HT T W E NNHS I I T N EDRI O O N R T OANC F A HDS E T RN R G A E N A OR HE "T 4L

Q6. Write short note on the following; related party transactions.

[December 2013, 3 Marks]

OR

“Related party transactions have always been viewed with the concern”.

In this context, briefly narrate the changes made under the Companies Act, 2013.

[December 2014, 6 Marks]

TAXMANN®

Y N A P M O # T N E M N R E V O '

D T , !

M O R F R E W O P F O E S A H C R U 0

ii

i

As per the exemption notification dated 5th June, 2015 issued by Ministry of Corporate Affairs

N TO C I !T C SA E S I N N A AR PT MF OO #E S EA HC T N FI

O Y DR EA I R I

D

U I QS E B NRU OTS I OD T NE C ESN S I SW FR O O E Y EBL VMO L I F EH O SMW I FD V OON RLA A PV G ROI N E RD PPL PO SA H A EN RHE E T E H

W T R T U E & B

7.7

a

Conclusion

-

Regulation 23 of SEBI (LODR) Regulations, 2015

Y T R A P D E T

A S L N E O R I FT O C A YS T I N L A A I R R T E Y T T A R MA NP OD E YT CA I L L E O PR H AT EI T W A L G U N MI L RA OE F D L L N A HO SD YN T A I T S N N EO DT I EC T S A I S L N EA HR 4T

L L A H S S N O I T C A S N A R T Y T R

A E PE T DI T EM T A L M E O R C LT L I !

D U A E H T F O L A V O R P P A R O I R P E R I U Q E R RD OE F T S LI A VL OE RH PT PY AB SO UT BN I I N D ME OR E TT N N AE R G ES YBN A O O MT I T I EDD EE N T SO T O I PC MO G MR N OPI CSW TN O I L OL D I O T UC F !A E SH NT AO R T T T YC T E R J A B PU DS ET Y T I A T L N E E R

Y F I C E P S L L A H S L A V O R P P A S U B I N M O E H 4

i.

T EA PH T NS ON I O T I C T AC S A NS AN R A T R FT O F EO R T UN T U A NO M YA T R M A PU DM EX I T A A L E M

R O T E N HNI O T I D T FC E O AE R S SN T

N AE E R MT E AFB NOL L EDA OH HI 4RS

ii.

E H T D N A E C I R P D E T C A R Y T N N A OF CI TE N C ER I R R P UE CH T EN CI I R N PO ET I S A A I BR EA VV I R T O A CF I A D L NU I M ER HO 4F

c.

T RS OE F R E DT EN EI NE EH HT T N I GS NI I L D A RV A O GR EP R P FA L E H S C T I U YS F T S A I T H A T S D LN L A A HL SA EV EO R T

T P Y I T PI MA T MSN OUE CBD I E TN T I S D I UML AOE H EHT C HU F 4S O b.

E E L HSB N T AA GR C NT I L I Y P T

T N PR E R AA AU R PET G A RDBN L E OT L F A N A I H AL I S E E R R L V E A I T N T I V I OO R T C E RP YP EC E IPR HL T OAE NPHR WECA OHUH DTSC HDH I YT N AI L AW LWYS L E N A T HNIO SITT N L I ENEC EI A DS T LE T A I T N V S MO A I L R MRE T F OPHO CPT A T FC TS I O D E USP UB NS AI OE ENI R T HMC N 4OA I a.

T I F M E E D Y A M E E T T I M M O C T I D U A E H T S A S N O I T I D N O C R E H T O H C U 3

EEO BET TT TT I C O

E N NMJ O N B I AMU T C COS C A NT SS OI N N I D T A O U C I R T T AAC S R NEAE S L AB P N R A A E T L R R YI T A O T R V R H C A AC PTU E DOSN ENRO T EO S A R FE L A E E LP R S A L RI VU A OT OR F RG E PN DD P ED I AD EI NA E SE ESU C E HR BX T I ON E EF T R AMO E HDON N WA TE N U DNA L A EE R V DE G I S R V YI E OR AE RO H MT PF

iii.

G N I R O T I N O M R O F S E D I V O R P

S N O I T C A S N A R T Y T R A P D E T A L E R F O

3. Omnibus approval:

TAXMANN®

DNDA EEEE T EGD A WRU L A E T L HC R E N SBCI E SS IO NN I OET F C I E I T D R DA E GPU I AR L T B RS OE N HO RT OE C SHE E CWB I FL L V O

R A S S E HN S S S O E I SLYT D E T C RR CA A A R S UGPN OE A D SRE R E T YT R T F AO R FA L E O P RPRU E DAO F E R S H T G NA T LI AE A R RWR T vO AAN N NDOO ONII T I A C T T C A C YS A AT I S NN S T AA NN AERR T R DhT T E YEAL T T G S DN R I L NI A PAAS 1.

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

7.8

OR

What do you mean by ‘related party transaction’? What are the provisions of listing agreement related to monitoring of related party transactions?

[June 2016, 5 Marks] Ans.

Regulation 2(1)(zc) of SEBI (LODR) Regulations, 2015

2. Approval of Audit Committee:

-

-

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

e.

GE NN I O D EF EO Y CR XI EP TX O E NE DH OT I R R E E T PF AA S RL OA F V DO I R L P A VP EA BH S LE L A R HF SE SI R L A U VQ OE RR PL L PA AH SS UD BN I A N MR A OE HY R CEA UN E 3OY

SHE T TH I I T DWT NDA AE S R YTE NAD D L AL I O PO H MSE NR OO A CC H G S NEE R I A H D T L SE O T R HNO UF AO E NCB EC EAD WEE C S TO A

L E L A BHP V O OWDR N T YA N P R I A P YA I DD N ES IAR R O BPF E T UMG N S ON ED CT I SE GE NN NE OW I I M D T L O C L O AYH A S L R L NO HE AH CN R E UG 4WS

b

S E I N A P M O C T N E M N R E V O G O W T N E E W T E B O T N I D E R E T N E S N O I T C A S N A R 4

a

SECRETARIAL AUDIT

Q7. Secretarial audit is a process to check compliance with provisions of all applicable laws and rules regulations procedures. Elaborate and discuss provisions of the Companies Act, 2013 with regard to Secretarial Audit.

[December 2017, 5 Marks]

TAXMANN®

H T I W D A E R

Y N A P M O C D E T S I L Y R E V %

E R O R C Y T F I F F O L A T I P A C E R A H S P U D I A P A G N I V A H Y N A P M OE CR CO I M L B R UO PS YE R E E P VU %R

E R O R C Y T F I F D E R D N U H O W T F O R E V O N R U T A G N I V A H Y N A P M OE CR O CM I L B R UO PS YE R E E P VU %R

S KE NR AO BM R MO OS RE F E SP G U NR I E WR OO RR R OC BD RE OR SD NN AU OH L E GN NO I F D NO S AN T S O T I U T U OT I GT NS I N V I AL A HI YC NN AA N PI MF C OI CB L YU R P E VR %O

LOAD A T N I R EEA R A L I T S B U E N A Q R O CE C I I L R T EP A S L LPSU I A A S G U A E NSB2 W NA L) AL A LU" EL N% HA T HN3 A ET L E I L I N W H B WEAA C N CO TN I L A P HA P I T Y L L A SP L E A L M I L NA F I O O C I F ECT O I PND E SOD C KAN CLA EL I A L HH P CS M DSO AE C OI T RI N T BN O AE 3 RD# E E0 VT OS E CI LH LYT L A Y TB HI STK TNC E I D E E UH H AT C

Circular dated February 8, 2019

T O N L L A H S

D N A

S N O I T A L U G E R S E BS UA SC FG O N SI NW OO I L S L I O V OF RE PH ET HI N 4E L B A C I L P P A E B

L A I R A T E R C E 3 N I A T B O O T D E R I U Q E R E R A S E I N A P M O C G N I W O L L O F E H T

T R O P E 2 T I D U !

d.

D SE I S T A S I BL E YH L

R T N E E Y T V R BI A G O UT S QN L I A AD V O NER ORP E T TN P S A A ES ES L U NB TO A I IN T WCM A ES O I N V E AH ER R T LTF L Y A O T HR H SAC EPA EDE T EO T T I T A ML T E N MR A OFU COS SR TI L I U D A P UT Y AET I EDT E HH N 4T E

SEE R NH OTH T I D T E C NH

T AA WO S NNSN ONR AI R O T O T U I N T YL O U T O R I SLT O A E C S PRE A S DHR N G EU H A T C A R OU L T R E R HSA R T N LS L OU A R I C R GI E E T DNR T I L T A O A O P MHV E E LR L H AMT !

HOO SRT EFY N HI T T AR FT A S O BP LA A D VL E LT OA A RH L PS E PS R AE A EI TI S R R I A U Y T QPI EDN T R E E LT L A A E L HE H SR T 5. Exemptions:

7.9

4. Approval of the shareholders:

Ans. As per section 204(1) of Companies Act, 2013 Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,

LR L A A L HU SC 3R I #C 0S I EH HT T N HI CD I H E I WI F C OE T P TS N ER UE QN EN S NA OM CE H RT E DN NI Y UT ET I R N E HE T D DE ES T UI SL S E I H ST E O NT I L T E R DO I P U GE R S A R T A I L M U CB R U I C S SY ETEI CN HNHL A O 4ETBI M M U N T E T EPCA N N H CT OR H DU I T S OGNFN S F N ADO E N E F I RNS ER O S RRTOAE S T S PO S R F OE D F O EG TVER S S HNR NWP I T O O SI TT IIP I G D L E D A N B UC EI L U AA ANHI U T T G A4D F S EEO H U E S HR N A Y E RT T EI T OE E N I NH T EA EL E A R DAO L PT S U NUF R ME E GEEQE S O EVPER R O R C S EHE E T DTHFV TON N N I T GTOOO E IN SOP D NIDET N R R N AU G G UN E SSAS N I P ANSO I E EMLNW D I D E O DRCAL S I N H T I L NF R I D S O A E T I LP F I N L A S D A BD E I YH UC A L RA S T NR T A I S OR E DFAJ N ! N AE NOI 2 E AEF MD T & E CN N S NIEU . BG D S EERE A C N E A D N!I I H HT N E I D 2U ED 4 !D PI &T F 2UEN .S DOF &A E FN .O ICOB

LY A N R A T N Y EB #D EE HT T T YI BM M EO DC AT MC EU CD NN EO R C E S I F

E MM R R LI AA F NNS O OI T N RS S A OE T F N UO T U R O O P MF C C OO! USD SRE E RT R T E E HAT T R MA I E NH I ET # T A NR GEO I T MR S E N E RB VE NV M I OOE 4'M

R NO OF I T S A E L I U C I ML RO OP F G NN OI TI T N D EU MA ND RN E VA O S 'D

LR S A R A R O DT T N N I AD ET U #S A E R HGI N T E I OT H T T SNR NUO O OC I S C T E A AI D N NFA EOP MNM MWO OOC CDY EGB R NN EI O KYI A AL T P MD O OND 4AA

TAXMANN®

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

7.10

NATIONAL FINANCIAL REPORTING AUTHORITY (NFRA)

Q8. “The NFRA is an independent regulator established under Section 132 of the Companies Act, 2013 to oversee the auditing profession”. Discuss.

[June 2019, 5 Marks]

N A T S G N I T N U O C C A O T G N I T A L E

R D EE CI B NR AC I S LE P R MP OS CA TS N E EC I ML I EO L P P MG N II T DI ND AU RA OD T I N N A OS MD R OA 4D

T S ME OG CG U HS T I WD DN EA T S A E I I C C I OL SO S P A SG NI N OT I I S D S U E F A O RD PN FA O S ED CR I A V DT R

E NN S AE T FS O M E YGV T N I I O L T A R N P UU QO M ECI HCR T O AF E S EF OE S R R EU E C VN S A OA E OI LM 4P

E YDRN E DS B O I N H I OD AT T D # A SON EN I E F DI I O C HO NM SA T ER T A RD PE X E SPSE R E DT S ER F T NA A O S O UL I F E S E T TR CGS E R SNNR N UR E ASI O OE CWMDKS S N U LOC EO I OI T V POT BM I D A C E FM HR O E AT O E H C N SEHT O A S T G I G I O N T C SR NC I R RI U E E E OC S P R WXSO S S I

OE K N F S N I PA ON T N O E TC E B N D T M E) FN L NU O

O A A H SC T V N G

R I A O E ONO U I D I T Q C N NPR E Y O E O E U NH ER VUDM A M T O ADR M E FO H E O H R CPUT O L S S LO D G T A S N S NE HRN I E S0A N L N

Y! I IMT !V R MUI I E 2# V2ACW &F O&XOF .O C.EDO

SE S HL CA I M UI H DT WI N V SI E E D T EN O PI T UFP ROU HED KSN A AC E L T ENX NIE ODY E A NV I AE M HC H T EC SR I S H S E E L W

TE S S F O M E NEE R HP I T F UF F RO O S HE E SK I E S T AA L ML A NINC ETEN PETI V N D I EF E A S V H OOT I PTS E C MPS E IUER L DT YN S AE O E NE MT F X !E E

H 2YD T &AN F .MA O

ii

under Section

Ans. 132 of the Companies Act, 2013

-

-

i

-

i

ii

iii iv

3 . / ) 4 # !

3 . !

2 4 9 4 2 !

0 $ % 4 ! , % 2 3 % 5 3 3 ) $ % 4 ! , % 2 4 ) $ 5 ! $ . ! ' . ) 4 .

5 / # # !

Y MB OS CN O DI NT AA D GN NE I R OM T M I N O OC ME R N N

OO G N DPI EUI T S D A MU BR I! NF OTR I TIE D A UB GA M I T S RE E VONRD I O N T NI A AD G UN RA E I T DFN I O S U N O OWC EC CI !

YV AE R MRE E !CB NM 2A &L IE .P

GD NN I WA S OR L L O O T F C E ER HI T D

OR T IS E GH E C NT I N G A NRV O OFE L I E R MG BS IR SN E O A I S N H N AC R PE E MMC N OI LO CG C EI HVE T N AI D U NHN S AI E L G YB AI NT R AS E PE H MLT L T OA R CH O P DSE ESR T E S S O I S L T A YL S R CE E E VRY %OO L SP S A M L C E

C I L B U P D N A S K N A B S ME OE RP F U YR EE NR OO R MC DY EF T WF I OF RO R OS BS E EC VX AE HN HI CS I N H O WT I SU E T I I T N S AN PI L MA I OC #N EA N HI 4F

b

C I L B U P E H T M O R F S T I S O P E D T P E C C A H C I H W S E I N A P M O # E H 4

a

Q10. You are a company secretary of a listed company. The company has borrowings from the Banks/FIs worth Rs. 75 crores, which is in the form of Term Loan and Working Capital Finance. You noticed that the company is not having Vigil Mechanism in place. Suggest the suitable strategy to the Board for establishment of Vigil Mechanism in the company quoting the relevant provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

[June 2019, 5 Marks]

R GMO NSS I ON N L R AE E BHC CN SE E O I MC N LE AI PG N I I MV U O N CAE HG ES HI R L I T B E DA H T T NS T AE R YLO NLP AAE PHR S O M S T OES S CS E A E DL Y EC O T S RL I OP L YS SM R AE E VLD ECN TGA N A S I R HW O T SOT C L E L E DO R

F I I S V D E OER C RHI N PTE A OHV T TE RR GO I NF G I

C I L B U P E H T M O R F S T I S O P E D T P E C C A H C I H W S E I N A P M O # E H 4

D N A S KS NE AE BP U MR E OR RO F R YC EY NT OI F MF F DO ES WS E OC RX R OE BN I ES VN AO HI T HU CI T I T H S WI N SA L E I I C N AN PA N MI F OC #I L EB HU 4P

b

TAXMANN®

T DDR EE O T BP S I I E L R R C YS O R ET E VRS EPE

TEED Y A B OE HYL B T P I SA R M M E C D ES S I E DR A V N OSA P RE E PI SB R N OY AT PC A EM MR OI S CDA RR FO O E SFN E MN S SA S I A N L AM C H RHC C OE U SM S S A N LI L I C G S HIN CVR UAE SHC S N RL I OB O C YA NT E S AE N I PL U ML N A OHE G CS

a

-

2014

7.11

-

Note: This list is inclusive and not exhaustive)

VIGIL MECHANISM

Q9. Write short notes on the following; Whistle blower mechanism.

[June 2014, 3 Marks] Ans.

Ans. Vigil Mechanism under Companies Act, 2013

Section 177(9) of the Companies Act, 2013

Rule 7 of the Companies (Meetings of Board and its Powers) Rules,

Governance Risk Management Compliances & Ethics (GRMCE) | CRACKER AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

Ritika Godhwani TAXMANN July 2022 4th Edition 9789356222786 426 PAPERBACK

Rs. : 475 | USD : 37

Description This book is prepared exclusively for the Professional Level of Company Secretary Examination requirement. It covers the questions (topic/sub-topic wise) & detailed answers strictly as per the syllabus of ICSI. The Present Publication is the 4th Edition & updated till 31st May 2022 for CS-Professional | New Syllabus | Dec. 2022/June 2023 exams. This book is authored by Adv. Ritika Godhwani, with the following noteworthy features:

· Strictly as per the New Syllabus of ICSI · Coverage of this book includes Fully-Solved Questions of Past Exams; Topic-wise



Solved Paper: December 2020 | New Syllabus



Solved Paper: June 2021 | New Syllabus



Solved Paper: December 2021 | New Syllabus



Solved Paper: June 2022 | New Syllabus

· [Arrangement of Questions] Questions in each chapter are arranged 'sub-topic wise'

· [Important Additional Questions] with Answers are provided · [Marks Distribution] Chapter-wise marks distribution · [Previous Exam Trend Analysis] from June 2019 onwards for New Syllabus

· [ICSI Study Material] Chapter-wise comparison · [Changes in Questions due to Amendments] is also given

ORDER NOW