NEW SYLLABUS
531
Roll No.
Time alowed : 3 hours Maximum marks : 100
Total number of questions : 6 Total number of printed pages : 15
NOTE : Answer ALL Questions.
PART-I
1. (a) You are an extrovert Company Secretary possessing rich experience of more than
a decade in providing professional advice on a diverse range of corporate and economic
laws with special emphasis on best governance practices, risk management, principles
and practice of environmental, social and governance, and corporate sustainability
reporting.
You are known for implementing governance and ethics into the very fabric of the
client's organization, revising and re-framing the compiance framework. policies, processes
in line with the corporate and local regulations and guidelines, exercising company's
zero error and zero breach standards and contributing strategically to the achievement
of business objectives and goals.
You have recently been approached by 'Air Voice Limited' (shortly Air Voice), an
unlisted Public Company, having its registered office at Pune.
'Air Voice' has provided the following data from its audited financial statements :
in Crores)
Financial Paid up Share Turnover for the Aggregate of
Year Capital as on Year Ended outstanding loans,
31st March debentures and deposits
2018-19 5 100 60
2019-20 5 110 55
7 95 50
2020-21
2021-22 7 90 45
7 75 40
2022-23
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During the FY 2022-23, the iquidity of the Conpary was highiy atfected due to
the brunt of stiff competition, wafer tthin margis ard ue to Coid 19 pardernic.
The aggregste outstzding kers, debertures and deposits increzsed irom 45 cTOre
as on 31st March 2022 to 60 cIIe 2s On 30h Septenber, 2022 ad rooped
down to 4) cToHe s on 31s March 2023. There was TO Sch ingease in he
aggregsie of otstang kas, debertures ad deposits áuring te atie finacial yeas
Air Voice, which ws obligaed to coAstitute n Audit Comnitee in the Fnancial
Year 2919-20 decided to dismantie it in the FY 2023-24. Now, taking into account
the above inputs and in the light of the provisiors of the Companies Act, 2013,
exarrine:
(i) Whether Air Voice Limited has complied with the provisions of the Act and
the Rules made thereunder in dísmantling the Audit Committee ?
(3 marts)
(i) What wil! be yor answer in case Air Voice Limited is a subsidiary of Fast
Voice Limited, a listed entity ?
(2 marks)
(b) Mrs. BhAwani, one of the direcors in ABC Limited (Listed Entity) got evidence against
Mrs. Govwri, Chief Financial Officer (CFO), that she is indulged in the revenue leakage
ativities in the Company. Mrs. Bhawani is scared to report the above matter since
Mrs. Gowri is a very close relative of other Directors, and Mrs. Bhawani will not
get adeqate safegvards from the Company. Advise Mrs. Bhawani, refering to provisions
of the Companies At, 2013, regarding the vigil mechanism, on the following points :
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( u Atn tthawan ('iwww w the saloguards mochanism option available
in th HÊNUN VSutng the abve wporting.
(3 marks)
WhiN Igwng authviy te whom victins can access ko report the above
(! mark)
What a the isclsry rguirçmçuts of details of Vigil Mechanism ?
(! mark)
ue N nit hs bnwet asut of ? S000.000 from its director, Mt. Timothy
àk this wg, the (mpuy failet to obtain the prior approval of the Audit
(tNWIUtni unKT the pvisiAs of Seotion l77 of the Companies Act, 2013.
t Nay Audxs or the (mpuy expesel the view that the approval of Audit
aHiRwas tHHNLy bving a related party transaction. However, the Company
EN mt bis mNN that sune this tr¡nsaction is not covered under the
ie py NIR N NY Sion l88 of the Act, approval of Audit Committee
N NRae NhNE H (muy has ixot muited any violation of the provisions
R r g te he pQViNQUN of the (OmpueN Aet, 203, examùne :
Whh ibus PRUvl o Auht('mmittee was nevde to the bomowings,
h NAOR was tN a 'Relatd Party Trausaction' under Section 188
(3 marks)
( NN NAtnappoval ot Autit (ommter be obained tor related party
pÜE und it tn N wbat will be the ettèt on the transaction ?
(2 marks)
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(CML),
(a) Mr. Manoj was acting as an Independent Director of Cine Movies Limited
Director.
listed entity, during his second term of his appointment as an Independent
a
Unfortunately due to sudden demise of his son on 01.10.2023, in a tragic road accident,
of CML
Mr. Manoj resigned from his coveted position as an independent Director
w.e.f..15.10.2023 which was duly accepted by the Board. However, due to his extreme
potential in effectively guiding the Board, he was approached by CML on 15.04.2024
14
and was offered the position of Executive Director in one of the Companies belonging
to the Promoter's Group. Referring to SEBI (LODR) Regulations, 2015, answer whether
the proposed offer of Executive Director to Mr. Manoj is valid in law as per Company
Act, if it is accepted by him No
(2 marks)
(e) In the light of the SEBI (LODR) Regulations, 2015, answer the following questions :
What shall be minimum number of members in a Risk Management Committee
(RMC) ? 3
?
(i) Can Senior Executives of a listed entity be members of the RMC
(i) What shall be the gap between two meetings of the RMC ? 18o
(3 marks)
directly
2. (a) Environmental Impacts are changes in the natural or built environment, resulting
water, fish, wildlife
Irom an activity that can have adverse effects on the air, land,
Contd.
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or the inhabitants of the ecosysten. Discuss the ramifications of environmental impact
from the following :
() Pollution and Contamination.
(i) Mass Transit on maintenance of infra-structure, facilities and vehicles.
(ii) Fossil Fuels.
(v) Health.
(v) Shipping.
(3 marks)
issues
(b) 'Business Ethics' is the study of business situations, activities and decisions where
wav a business conducts
of right and wrong are addressed. It acts as guidelines for the
features of Business
itself and its transactions. In this context, what are the salient
Ethics ?
(5 marks)
edge analytics, where
(c) In the Information Era' rapidly evolving technologies and cutting
business processes and
massive amount of data is used everyday to drive critical
organization. Elucidate the various
decisions, data governance plays a vital role in an
for better analysis, consistent
data governance principles that are espoused globally
compliances, improved data management and data quality ?
(3 marks)
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3. (a) Discuss the applicability of Section 118 (10) of the Companies Act, 2013 with
lo.
example.
(b} Discuss the applicability of SEBI regulation 2015 that describes the role of directors
in prevention of Insiders Trading.
(c) The Secretarial Standard 1(SS1) requires Company Secretary to oversee the Vital
process of recording and facilitating implementations of the decisions of the Board"
Discuss SST with its applicability.
(5 marks each)
Attempt all parts of either Q. No. 4 or Q. No. 44
4. (a) Discuss the impact of Global ESG frameworks and rating agencies on Indian Corporations
in 2022-23 with suitable example.
Businesses should-conduct and govern themselves with integrity and in Ethical,
(6)
Transparent and Accountable mannet.» Discuss with example.
(c) An Institutional Investor is a legal entity that pools funds of a large number of individual
investors or other legal entities and invests in different financial instruments such as
different
stocks, bonds, commodities or any other investment option. There are several
in
types of Institutional Investors in the market depending upon their specialization
prominent
specific asset classes and the investment strategies. State and brief at least five
types of Institutional Investors that are in vouge in India.
(5 marks each)
Contd.
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OR (Alternative questions to Q. No. )
4A. () 'Resource Efticiency is using the earth's limited resources in a sustainable manner
growth
while minimizing the impacts on the environment. Continued worldwide population
associated resources.
is resulting in a global increase in demand for products and
can provide and renew.
Currently, our society consumes more resources than the earth
natural resources.
Only improved eficiency can counteract the soaring consumption of
resource efhiciency
In this context, briefly explain the ways and means to improve
in business organizations.
(8 marks)
the world
(D (i1) Family businesses are the major form of enterprise in India and across
family values
AC
wherein all key managerial positions are held by family members and
Corporate Govemance
are ingrained in organization values. There are certain provisions of
been incorporated
in a family-owned Companies that has been legalised and have
enshrined in the Act.
in the Companies Act, 2013. Explain such provisions
(7 marks)
PART-II
SA
Atempt all parts of either @. No. 5 or Q. No.
organizations with 38 per cent
5. Cyber risks are cited as the biggest threat faced by Indian
With this, cybersecurity
of respondents feeling highly or extremely exposed to it says a survey.
risk radar when compared
has jumped two spots from number three to number one on the
Survey-India edition stated.
to the 2022 Global Risk Survey, the ABC's 2023 Global Risk
ABC said the final results of the survey are based on 3,910 survey responses fromn Business
and Risk Management leaders (CEO, board, risk management, operations, technology, finance,
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their
audi) across 67 territories providing their views on the status and direction of risk in
organization. 163 Indian organizations were a part of this survey. Other digital and technology
cent).
risks are also top concerns for business leaders in India (at 35 per
To address the challenges, Indian organizations are making bold investments in cybersecurity
with more than half of the respondents planning to invest in cybersecurity tools (55 per cent)
and AI, machine learning and autonmation technologies (55 per cent) in the next 1-3 years,
according to survey findings.
To back these investments, 71 per cent of Indian organizations are gathering and analyzing
cybersecurity and IT data for risk management and opportunity identification. Globally 61
per cent of the organizations are doing the same.
2023 Global Risk Survey shows that Indian business leaders are not only demonstrating an
increased appetite for taking risks but are also doing a reasonable job of identifying opportunities
presented by risks.
Further, Indian businesses.are seeing technology disruptors as opportunities, with 69 per cent
of Indian executives seeing Generative AI as an opportunity (against 60 per cent globally).
The survey also revealed how organizations are taking the help of emerging technologies such
as GenAI for risk management, with 48 per cent of Indian enterprises having deployed AI
and machine learning for automated risk assessment and response to a large extent. This
is slightly lower than the global response of 50 per cent.
Contd.
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To leverage the positives brought in by risks md disruptions, the survey said 88 per cent
ot lntian onganizations are nctively investing in building resilicnce in thcir ccosystem over the
last 12 months. Gilobally, 77 per cent of the businesses are investing in the same.
Based on the above facts answer the following questions :
(a) "Cyber Risk is a critical issue demanding immcdiate action." Discuss.
(b) "lndia can build a more resilient digital environment by prioritizing cybersecurity, fostering
collaboration, and promoting cyber awareness." Discuss.
(e) *"Indian enterprises having deployed AI and Machine Learning for automated risk
assessment." Discuss.
() Elaborate that every listed company should have Risk Management Committee (RMC)
as per Regulation 21 of SEBI (LODR) Regulations, 2015.
(5 marks each)
OR (Alternative questions to @ No. 5)
5A. () Newgen Technologies Lid. (NTL) 0s a multimillion-dollar publie limited company with
over two decades of time-tested experience for clients across the globe. As a leading
offshore software development company, headquartered at Hyderabad in India, NTL
employs over 525 plus professionals across the globe.
In the last year, NTL carned a reputation and niche for its services. For example,
asuper critical boiler in a thermal power plant takes 10-12 days to be fine-tuned
or synchronized. It means system is shut for power generation and lead to loss of
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synchronize
millions of dollars. NTL came up with a solution that cuts the time taken to
services
a boiler from 10-12 days to, 3-4 days through the use of software and
of IT professionals.(Dhe main strength of NTL is the IT professional they employed
with it.) It captured data through sensors on the boilers, use the algorithi built in
house to check nearly 240 parameters and over 10,000 combinations to tune the
boiler. It also helped a global heating, ventilation and air conditioning fim to bring
down the time taken to design an ACsolution in a building or office from 9 days
to just 2hours now, However, traditional outsourcing business of NTL is dying a
focus
slow death as clients cutting their budgets on such services and shifting their
on newer areas such as digital and cloud.
(Three-fourth of the revenue of NTL is from traditional services.) However,(half of
flexibility to determine
its revenue still comes from fixed price projects which allow it the
services, Now, the aim
the resources it deploys and use software tools to deliver
software
is to increase that goal by reducing the dependency on people and more on
led services which coincide with its goal of IT Modernization.
spending
NTL derives a major portion of its revenues from customers discretionary
are from UK, USA
which is inked to their business outlook. Its major revenues
and other European countries.,
the availability of work
TSome draft legislations in USA have been made to restrict
mobility of people
visas) Such protectionist policies threaten the prospect of global
development requires
which may also affect the work of NTL as distributed software
free movement of people.
Contd.
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Appreciation of the rupee against any major currency results in the revenue denominated
in that currency to appear lesser in reported term_) Then, there may be different
exchange rate when sale took place and when invoice is collected.
Internal Financial Control System :
The internal Financial Control System of NTL has been laid down as below :
(a) Recording and providing reliable financial and operation information.
(6) Safeguarding Assets.
(c) Ensuring compliance with corporate policies.
(a) Well defined delegation of power.
(e) Efficient ERP system.
Internal audit by one of the big audit firm.
(g) Audit Committee found internal financial control adequate.
Based on the above inputs, answer the following questions :
(a) Discuss the SWOT analysis of Newgen Technologies Limited.
(6) Elucidate the types of exposures risks to be encountered by the Company.
(c) Discuss the efficacy of the Internal Financial Control System of Newgen
Technologies Limited.
(d)
Briefly explain the political risk to be encountered by Newgen Technologies
Limited.
(8 marks)
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(i) Modern advancements in technology provide fraudsters a variety of chances nowadays.
Even though technological advancements might facilitate fraud risk management for
businesses, it is a fact that these advancements also provide opportunities for con
Assess
artists. Fraud charges may cause businesses to loose clients due to reputational damage.
In order to challenge the brunt of frauds, explain the 'fiaud risk management processes'
fepr
t
that a company may adopt to effectively manage its fraud risks.
(6 marks)
(ü) In the context of Risk Management, answer the following questions :
(1) Which of the following is not an Internal Risk ?
(a) Economic factors such as price fluctuations, changes in consumer
preference, inflation.
(6) Technological factors, unforeseen changes in the techniques of production
or distribution resulting into technological obsolescence etc.
(c) Physical factors such as fire in the factory, damages to goods in ransit.
(a) Human factors such as strikes and lock-outs by trade unions; negligence
and dishonesty of employees, accidents or deaths in the factory.
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(2) Which one of the following would LEAST likely be included as a source
of market risk ?
(a) Natural Disasters.
(6) Recessions
(c) Political Turnoil
(a) None of the above
(3) Corporate Governance Risk is not intended to identify deficiencies that can
damage the following important existential aspects of the company :
(a) Reputation
(b) Existence
(c) Sales Growth
(a) Continuity.
(2x3=6 marks)
PART-II
6. (a) A manufacturing Company based at Chennai wanted to assess its sustainability
sustainability
performance, identify areas for improvement and take action to enhance its
and
with a view to improve its reputation and brand image, foster innovation
competitiveness. The Company is proposing to publish an annual sustainability report
that would be made available to stakeholders including employees, customers, shareholders
andthe wider community.
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sustainatility att
In this regard, the Company proposed to conduct a connprehensive
ar
The scope of the audit would include the Company's operatioms, supply chain
ervironITtert.
product life cycle. The audit would focus on the Company's irnpacts o the
ernissions as well as its stial
energy and resource use, waste generation, greenhouse
and ethical responsibilities.
Secretaries, based at Chennai, having
You are a part of a reputed firm of Company
and knowledge, to provide
a core team of subject matter professionals, with skills
a wide range
innovative sustainability audit services that meet varied needs across
sustainability audit of
of industries. As a Company Secretary, capacitated to conduct
of the said
organizations, you have been assigned to conduct a sustainability audit
manufacturing company.
sustainability audit process flow briefing
In this regard, you are asked to prepare a
the manner in which such an audit may be conducted.
(7 marks)
sustainable,
(b) Companies with high ESG [Environmental, Social, Governance] scores appear
strong relationships
boast fewer liabilities, build positive brand reputations and maintain
advantage to attract talent,
with their clients and stakeholders that eventually have an
impressing customersand raising capital.
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Enumerate the key benefits, small to mid-sized companies can gain by starting an
ESG program in respect of the following :
(). Competitive Advantage
(ii) Cost Reduction
(ii) More Attractive to Lenders and Investors
(iv) Supply Chain Prospects.
(8 marks)
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