CURE Pvt Pharma. Ltd. is a rapidly expanding Indian pharmaceutical company engaged in the worldwide development, manufacture and distribution of a wide range of pharmaceutical products. The central strength of the company lies in the creation and manufacture of differentiated in-house pharmaceutical products, which it commercialises through its marketing infrastructure spread across geographies and partnerships with multi-natal products.It has become one of the world's largest manufacturers of Tuberculosis (TB) drugs. Today, it has significant market share in the cardiovascular, diabetology, asthma, paediatrics, CNS, anti-infectives and NSAIDs therapy segments.

The Chairman claims that individuals are the most important part of any organisation because they provide the inspiration, innovation, vision and encouragement that keep an organisation alive. He said that the workplace is where people spend much of their time every day and a happier employee will be a catalyst for the growth of the company. The company debited the profit and loss incentive statement to As reflected in the tremendous record, the company has always been able to respond to market changes. The company has seen a rise in profits in the last ten years alone. The effect of careful preparation, differentiated strategies, complex products and focused execution across markets has been this development. Innovation is the backbone of a pharma corporation.

In the future, the company will consolidate its portfolio of generics while concentrating on complex generics and specialty products. With sufficient acquisitions, calibrated investments in R&D, backed by the correct skill sets, the company expects to rise to this challenge. This will allow it to improve the quality of its organisation and shift from the current model to new horizons.

Furthermore, with a dedicated field force to support its branded product line, the organisation received special consideration among paediatric specialists, primary care physicians and the OB/GYN women's health group. Driven by strong commercial capabilities for both branded and generic goods in the US market, the company is strategically positioned to pursue its niche-based growth strategy.

In order to increase productivity and protect the environment, the organisation is consciously investing in the implementation of green chemistry and enzymatic technologies. Its special expertise has been focused on fermentation technology products and it is on track to launch newer products in this area.

The company's research and development (R&D) investments have helped it achieve a leading role in the launch of differentiated products and become a tremendous player in the field of generics. As it grows steadily as a specialty pharmaceutical player, it forms the foundation for more achievements. These investments are calibrated for uncertainties and acceptable returns and include not only established markets such as the United States, Europe and Japan, but also emerging markets. Contribution to Banaras Hindu University of Rs. 1,50,000, authorised and notified pursuant to Section 35(1) (ii). This number has been debited on the profit and loss statement.

It is well on track to emerge as an innovation-led transnational pharmaceutical powerhouse offering accessible healthcare solutions with uncompromising consistency, with a large team of scientists and technologists working at its state-of-the-art facilities in India and abroad.There was a healthcare exhibition in London in the month of October, 2017 and where all the directors of the company had gone to attend this particular exhibition. Since all the directors were present in London, they decided to hold the Board meeting in London itself.

Company believes it carries a deep social responsibility. Its products touch and heal human lives. There is a premium in making products of the highest quality. This quality needs to be derived froma consistently high operating benchmark.

Company aims to transform rural India by creating sustainable and replicable programs around economic, social and infrastructure development targeted at uplifting the poorest of the poor residing in remote villages of India. Company has made a donation of Rs. 1,00,000 to Swachh Bharat Kosh. This payment is debited to statement of profit and loss.

Company maintained its upward growth momentum amidst very challenging and dynamic global economic conditions in the year gone by. The Company ended the fiscal on a high note registering significant growth across its key markets.

CURE Pharma Pvt. Ltd called its AGM ON 25-08-2017 and at the meeting, the quorum was complete. The proceedings of the meeting started and agenda items were taken up. After completing few agenda items, the Chairman, Mr. S, adjourned the meeting on his own without even seeking the consensus of the members who were present at the meeting. Mr. S suggested to schedule this adjourned meeting at a later date which would be decided by the Board of Directors.

CURE Pharma Pvt. Ltd. provides taxable as well as exempted medicines. Turnover of CURE Pharma Pvt. Ltd. during the month of December, 2017 is as under:

Particulars Rs.

Value of exempted supply of medicines 60,00,000

Value of taxable supply of medicines 1,28,00,000

Value of Zero rated taxable supply of medicines 32,00,000

Supply made for personal use 20,00,000

Total 2,40,00,000

Details of Input tax for the month of December, 2017 are as under:

Particulars CGST (Rs) SGST (Rs.) IGST (Rs.)

Total Input tax available 4,32,000 4,32,000 2,16,000

The above Input tax on input includes the following:

(i) Input tax on input exclusively used for supplying exempted medicines 72,000 72,000 28,800

(ii) Input tax on input of medicines exclusively used for supplying taxable medicines (including Zero rated supplies) 2,16,000 2,16,000 14,400

(iii) Input tax availed on inputs which are not eligible for credit u/s. 17(5) 72,000 72,000 25,200

(iv) Input tax on input exclusively used for supplying medicines for personal use. 43,200 43,200 21,600

The Company recorded consolidated sales of Rs. 30 Crores in FY 2018, a growth of 24% over FY 2017

Net profit increased by 13% to Rs. 90 Lakhs as compared to 80 Lakhs in FY 2016

Keeping the long term vision and cost competitiveness in mind, the Company continues to invest in creating new manufacturing facilities as well as augmenting existing manufacturing facilities globally to aid efficiencies as wellas build capacities to meet the future demand. It also remains committedto investing in technology, automation and safe-guarding intellectual property. The Company invested Rs. 20 lakhs on for capital investment during FY 2017-18

Mr. W is working as Chief Accountant in CURE Pharma Private Limited. The Board ofDirectors of the company propose to charge him with the duty of ensuring compliance with the provisions of the Companies Act, 2013 so that books of account can be properly maintained and Balance Sheet and Profit and Loss Account can be prepared as per the provisions of law

Statement ofProfit &LossofCURE Pharma PvtLtd., aresident company showsnet profit ofRs. 90,00,000 for the financial year ended on 31st March, 2018 after debit/credit of the following items.

Credited to the statement of Profit and Loss:

Rent received from vacant land Rs.1,20,000.

Rent received (gross) from a commercial property owned by the company- Rs. 2,50,000 (Tax deducted by tenant @ 10%).

Interest received on income tax refund Rs. 1,00,000

Profit on sale of unused land Rs. 10,00,000

Other Items Debited to the Statement Profit and Loss:

Depreciation charged to the Statement of Profit and Loss Rs. 12,00,000

Contribution to Political party amounting to Rs.2,00,000 paid in cash.

Payment made to transporter Rs. 1,00,000 by account payee cheque, but no tax has been deducted at source. (Transporter is having PAN and furnished declaration that he iscovered under Section 44AE and is not having more than 10 goods carriages at any time during the previous year).

Provision made for income tax Rs. 3,00,000.

Loss of Rs. 2,50,000 incurred by way of trading in futures and options (derivatives) in shares in a recognized stock exchange.

Additional information:

Depreciation 20,00,000. However, while calculating such depreciation, rate applicable to computers has been adopted for (i) accessories like printersand scanners, and (ii) EPABX. The written down value of these items as on 01.04.2017 is given below:

Printers and scanners . 3,00,000

EPABX . 5,00,000

Additional Depreciation on Plant and machinery purchased for Rs. 20,00,000 on 15 th October, 2017 has not been considered while calculating depreciation as above.

Provision for audit fee Rs. 1,00,000 was made in the books for the year ended on 31st March, 2017 without deducting tax at source.

Such fee was paid to auditors in September, 2017 after deducting tax at source under Section 194J and tax so deducted was deposited on 6th October, 2017.

The company during the financial year 2014-15 made aprovision for anoutstanding billofRs. 1,00,000 for purchase of raw material. Out of such outstanding amount the company has paid Rs. 50,000 in cash on 15th September, 2017.

During the year the company has issued 1,00,000 equity shares of face value of Rs. 10eachat premium of Rs. 90 each. The fair market value is Rs. 60 per share at the time of issue of shares.

Unused land which was sold during the year for Rs. 50,00,000wasacquired bythe company in the financial year 2013-14 for Rs. 40,00,000.

PART A - Multiple Choice QUESTION (2 Marks each).

What of the activities below does not account for supply?

An architect in India seeks legal advice free of charge from his brother who settled in London about his family dispute.

In lieu of certain small charges, a Resident Welfare Organization offers the service of depositing the residents' energy bills.

• An air conditioner is permanently moved by an air-conditioner dealer from.
• A dealer of air-conditioners permanently transfers an air conditioner from his stock in trade on which ITC has been taken, for personal use at his residence.
• An electronic commerce operator in India seeks legal advice for its business from its head office in US free of cost.

Sales inside the state-Rs. 2,00,000 were made by a taxable individual following supplies in January, 2018. India exports- Rs. 60,000. Supplies to state-based SEZ-Rs. 40,000. Under the Letter of Undertaking (LUT) or bond, he does not wish to clear goods. During January, 2018, the input tax credit available to him, IGST-Nil. Rs.10,000. CGST- SGST SGST

- Rs.20,000. Rs. In his electronic cash ledger or electronic credit ledger, there's no opening balance. SGST-9 percent, CGST-9 percent, IGST-18 percent. Tax rates are How much is in cash payable by him?

CGST - 8,000 SGST - Nil

(b) CGST - 11,600 SGST - 1,600

CGST - 8,000, SGST - Nil, IGST - 5,200

CGST - 8,000 SGST - Nil, IGST - 16,000

Which of the supplies below are GST exempt?

• Warehousing of jaggery
• Loading and unloading of green tea packets
• Warehousing of coffee beans
• Warehousing of rice

(a) (1) and (3)

(b) (1), (2) and (3)

(c) (3) and (4)

(d) (1) and (2)

Which of the following services are OIDAR [Online Information Database Access and Retrieval] services?

• Online course consisting of pre-recorded videos and downloadable pdfs plus support from a live tutor
• Pdf document manually emailed by provide
• Pdf document automatically downloaded from site
• Pdf document automatically emailed by provider's system

• (a) (1) and (3)
• (b) (1), (3) and (4)
• (c) (3) and (4)
• (d) (2), (3) and (4)

A taxable person is engaged in supplying restaurant service in Delhi. In the preceding financial year, it has an aggregate turnover of Rs. 90 lakh from restaurant service and Rs. 10 lakh from supply of farm labour and has earned a bank interest of Rs. 10 lakh. Such person wants to opt for composition scheme. Which of the following statements are true in context of composition scheme?

• Aggregate turnover of the taxable person in the preceding FY is Rs. 90 lakh.
• Aggregate turnover of the taxable person in the preceding FY is Rs. 100 lakh.
• Aggregate turnover of the taxable person in the preceding FY is Rs. 110 lakh.
• Supply of farm labour and supply of service of extending loans/deposits does not make the taxable person ineligible for composition scheme.

Supply of services other than restaurant service - supply of farm labour and supply of service of extending loans/deposits - by the taxable person makes it ineligible for composition scheme.

(a)(1) and (4)

(b)(2) and (4)

(c)(1) and (5)

(d)(3) and (5)

Stylish Technology Limited engaged in the manufacturing of mobiles and chargers. The company's Board of Directors consist of 8 directors i.e. Mr. Ram (Director), Mr. Shyam (Director), Mr. Mohan (Director), Mr. Vijay (Director), Mr. Naresh (Director), Mr. Ashish (Independent Director), Mr. Neeraj (Independent Director) and Mr. Anil (Small shareholders' director). Calculate the number of directorstoretireatAnnualGeneralMeetingheldon 15th September, 2017.

• One
• Two
• Three
• Four

DEF Limited engaged in producing and manufacturing cotton. DEF Limited is having one subsidiary

XYZ Limited. The company DEF Limited wants to appoint an Independent Director on its Board during the financial year 2018-19. The company has CV of four persons who are interested for appointment as Independent Director in DEF Limited. Advice the company regarding the selection of the independent director amongst the following four persons whom they can appoint:

• Mr. Rajeev who is promoter of XYZ Limited
• Mr. Smith who had pecuniary relationship with DEF Limited during the F/y 2016 -17 and 2017-18.
• Mr. John whose relative hold the position of Key Managerial personnel in XYZ Limited in the F/Y 2014-2015.
• Mr. Vishal along with his relatives holds 2.5% of the total voting power of the DEF

XYZ Limited is an unlisted fabric manufacturing firm. The company's turnover is Rs. 100 crore as of the last date of the new audited financial statements. The organisation has seven directors on its audit committee. Advise the company by selecting the best choice for the company with regard to the independent director's appointment criteria and the required number of independent directors

• The appointment of independent directors is mandatorily required
• The appointment of independent directors is mandatorily required under XYZ Limited and the minimum number of independent directors is three.
• The appointment of independent directors is mandatorily required under XYZ Limited and the minimum number of independent directors is four.
• The appointment of independent directors is not mandatorily required under XYZ Limited.

The turnover of XYZ Ltd. as on the last date of latest audited financial statements is 150 crore rupees. An Intermittent vacancy of the independent director arises on 15 th June, 2018 in the company. The immediate Board meeting was held on 14th August, 2018. The vacancy of the independent director shall be filled up by-------:

Appointment of independent director is not mandatory.

• 14th August, 2018
• 14th September, 2018
• 14th October, 2018
• 10 State among the following companies, which company shall not annex secretarial audit reportwith its board report-
• Listed Company
• Public company having paid up share capital of 20 crore or more
• Public company having a turnover of 250 crore or more
• Public company having paid up share capital of 50 crore or more

PART B

Draft a "Board Resolution" to charge Mr. W, Chief Accountant, with the responsibility to comply with the rules of the Companies Act, 2013 on account books and balance sheets and profit and loss statements. (3 Marks)