(CA Inter)May26/Sep26

🌟Company Law MCQ's🌟 Chapter 10: Audit And Auditors

20 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: a. The surplus cannot exceed five percent of total CSR expenditure of the company for the financial year. b. The surplus shall not form part of the business profit of a company c. The surplus cannot exceed 10 percent of total CSR expenditure of the company for the financial year. d. The surplus shall form part of the business profit of a company

19 Modern Furniture Limited (MFL) is required to prepare the financial statement that comply with accounting standards and shall be in form specified in schedule III. But the financial statement prepared and presented are not in compliance with applicable accounting standards, therefore MFL required to disclose which of following: i. Deviation ii. Reason of deviation iii. Financial effects arise out of such deviation.

18 Compute the minimum amount that Modern Furniture Limited is required to spend on account of Corporate Social responsibility year 2022-2023. MFL was incorporated in August 2020. Net-profit made during the financial years 2020-2021 and 2021-2022 are ₹ 20 crore, and ₹ 38 crore respectively. a) ₹ 76 lac b) ₹ 1.16 crore c) ₹ 58 lac d) Since the company has not completed the period of three financial years since its incorporation, hence no CSR spending is required.

17 ABC Limited has its shares listed on a recognized stock exchange in India. During the current financial year ending on 31st March 2023, 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 account of the Company. You, as an expert, are called upon by SEBI to advise the earliest financial year to be quoted in application for reopening of books of account may be granted by Tribunal?

16 G Ltd. (a company having CSR Committee as per the provision of Section 13 of the Companies Act, 2013) decides to spend and utilize half of the amount of Corporate Social Responsibility on the activities for the benefit of all the employees of G Limited and the remaining half of the amount of Corporate Social Responsibility on the activities for the benefit of family members of employees of G Limited As per the provision of Companies Act, 2013 this would mean that:- (a) Total Amount spent on Corporate Social Responsibility Activities by G Limited for that financial year (b) No amount spent on Corporate Social Responsibility Activities by G Limited for that financial year (c) Half amount spent on Corporate Social Responsibility Activities by G Limited for that financial year (d) Half amount spent on Corporate Social Responsibility Activities and remaining half amount spent on Other Activities by G Limited for that financial year

15 Compute the minimum amount the company (Natraj Limited) is required to spend on account of Corporate Social responsibility year 2022-2023, if during the financial years 2019-2020, 2020-2021 and 2021-2022 net profits are 30 crore, 25 crore and ` 32 crore respectively.

13 Victory Limited was incorporated in January 2015. How much expenditure Victory Limited shall ensure to spend in pursuance of its Corporate Social Responsibility Policy: (a) The company shall ensure to spend in every financial year, at least 2% of the average gross profits of the company made during the 2 immediately preceding financial years. (b) The company shall ensure to spend in every financial year, at least 2% of the average net profits of the company made during the 3 immediately preceding financial years. (c) The company shall ensure to spend in every financial year, at least 1% of the average net profits of the company made during the 2 immediately preceding financial years. (d) The company shall ensure to spend in every financial year, at least 1% of the average net profits of the company made during the 3 immediately preceding financial years.

12 The Corporate Social Responsibility Committee of the board shall consist of: (a) Three or more directors out of which at two directors shall be Independent Director (b) Three or more directors out of which at least one director shall be Independent Director. (c) Three or more directors and all should be Independent Directors (d) Three or more directors with condition of not a single director should be Independent Director

11 The company X plans to cover its skilled as well as semi-skilled workers of its units under medical health insurance plan, for which the company X will bear the expenses. Will this expenditure be permissible under CSR activities as per the provisions of the Companies Act, 2013: (a) only expenditure on skilled workers is allowed (b) expenditure on both skilled and semi- skilled workers is allowed (c) Resolution to be passed in board meeting before incurring this expenditure and in the board report it must be mentioned, so that the same will be permissible under CSR activities (d) such expenditure is not permissible under eligible CSR activities