NCFM Compliance Officers (Corporates) Module mock test questions

Compliance Officers (Corporates) Module

Q1
Which of the following committees is non-mandatory to be constituted by listed company?
[ 2 Marks ]

(a) Share Transfer Committee
(b) Shareholders/Investors Grievance Committee
(c) Remuneration Committee
(d) Audit Committee
(e) I am not attempting the question

Q2
State which of the following is false? As per the Chapter XI of the SEBI (DIP) Guidelines 2000 specifying the Guidelines for Book Building an issuer company may make an issue of securities to the public through prospectus in the following manner: [ 1 Mark ]

(a) 100% of the net offer to the public
(b) 100% of the net offer to the public through book building process
(c) 75% of the net offer to the public through book building process and 25% at the price
determined through book building
(d) None of the above
(e) I am not attempting the question

Q3
In case of default in repayment to small depositors, intimation of such fact should be given within ________. [ 1 Mark ]

(a) 60 days from the date of default
(b) three months from the date of default
(c) 15 days from the date of default
(d) one month from the date of default
(e) I am not attempting the question

Q4
State which of the following is false? As per Chapter X of the SEBI (DIP) Guidelines 2000 stating the Guidelines for issue of debt instruments, in case of PCDs/NCDs the offer document shall contain ________________. [ 2 Marks ]

(a) premium on redemption
(b) premium on redemption and Yield on redemption of the PCDs/NCDs
(c) period of maturity
(d) redemption amount
(e) I am not attempting the question

Q5
As per the SEBI (ESOS and ESPS) Guidelines 1999, ______________________. [ 2 Marks ]

(a) an employee who is a promoter or belongs to the promoter group shall not be eligible to
participate in the ESPS
(b) an employee who is promoter shall be eligible to participate in the ESPS
(c) an employee who belongs to the promoter group shall be eligible to participate in the ESPS
(d) None of the above
(e) I am not attempting the question

Q6
As per the SEBI (ESOS and ESPS) Guidelines 1999 state which of the following is false? The Board of Directors shall disclose in the Director's Report the following details of the ESPS: [ 2 Marks ]

(a) Diluted earnings per share
(b) Earnings per share
(c) Price at which the shares are issued
(d) Number of shares issued in ESPS
(e) I am not attempting the question

Q7
Division of capital is subject to the approval by the Tribunal. [ 2 Marks ]

(a) FALSE
(b) TRUE
(c) I am not attempting the question

Q8
As per the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, for offers which are subject to the minimum level of acceptance and the acquirer does not want to acquire a minimum of 20%, the following percentage of the consideration payable under the public offer in cash shall be deposited in the escrow account: [ 2 Marks ]

(a) 90%
(b) 25%
(c) 75%
(d) 50%
(e) I am not attempting the question

Q9
In response to the notice of removal of Mr. D, director of Company X Ltd., he sent a representation. His representation could not be sent alongwith the notice of the Annual General Meeting for want of time. Resolution for his removal was passed at that meeting. Mr. D contended that since his representation was not forwarded to all memers and directors, resolution for his removal stands invalid. Is his contention valid? [ 2 Marks ]

(a) Yes, received late is no ground.
(b) No, as it was received late.
(c) I am not attempting the question

Q10
State which of the following is False? The Guidelines for Preferential Issues in the SEBI (DIP) Guidelines 2000 is applicable to __________. [ 1 Mark ]

(a) All types of financial instruments
(b) All financial instruments which would be converted into equity shares at later date
(c) All financial instruments which would be exchanged into equity shares at later date
(d) All equity shares
(e) I am not attempting the question

Q11
As per the SEBI (DIP) Guidelines 2000, for raising of funds through public issues, the due date for the final post issue monitoring report for all issues shall be ____________. [ 2 Marks ]

(a) 3rd day from the date of listing or 80 days from the date of closure of the subscription
of the issue whichever is earlier
(b) 3rd day from the date of listing or 50 days from the date of closure of the subscription
of the issue whichever is earlier
(c) 3rd day from the date of listing or 75 days from the date of closure of the subscription
of the issue whichever is earlier
(d) 3rd day from the date of listing or 78 days from the date of closure of the subscription
of the issue whichever is earlier
(e) I am not attempting the question

Q12
A shareholder, Mr. P, holding 550 shares of listed company makes an application to the company for sub-division of its shares. The company charges certain fees from Mr. P. State whether the action of the company is correct? [ 1 Mark ]

(a) No
(b) Yes
(c) Yes, only if the fees are as agreed with the Stock Exchange.
(d) Yes, only if the fees are as agreed by the member.
(e) I am not attempting the question

Q13
Omission to send notice of annual General Meeting to member invalidates the resolution passed in that meeting. [ 2 Marks ]

(a) FALSE
(b) TRUE
(c) I am not attempting the question

Q14
As per the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, any person other than an acquirer who has made the first public announcement, shall make a competitive bid within _______. [ 2 Marks ]

(a) 45 days of the public announcement of the first offer
(b) 21 days of the public announcement of the first offer
(c) 30 days of the public announcement of the first offer
(d) 14 days of the public announcement of the first offer
(e) I am not attempting the question

Q15
The main object of the Securities Contracts (Regulation) Act 1956 is _________. [ 2 Marks ]

(a) to protect the interest of the investors and promote and develop the securities market
(b) to control the monopolistic and restrictive trade practices followed by the listed companies
(c) to consolidate and amend the law relating to companies and certain other associations
(d) to prevent undesirable transactions in securities by regulating the business of dealing therein
(e) I am not attempting the question

Q16
Board of directors may give guarantee without being previously authorised by way of special resolution if ______________. [ 2 Marks ]

(a) it has been approved by unanimous resolution of the board
(b) it has been approved by the Central Government
(c) it has been approved within six months
(d) it has been approved within twelve months in general meeting
(e) I am not attempting the question

Q17
Contracts entered into by the company before commencement of business are __________.
[ 2 Marks ]

(a) valid
(b) voidable
(c) void
(d) not binding till date of commencement
(e) I am not attempting the question

Q18
As per the SEBI (ESOS and ESPS) Guidelines 1999, the amount payable by the employee, if any, at the time of grant of option ____________. [ 1 Mark ]

(a) may be refunded by the company if the option is not exercised by the employee
within the exercise period
(b) may be retained by the company in suspense account if the option is not exercised
by the employee within the exercise period
(c) may be forfeited by the company if the option is not exercised
by the employee within the exercise period
(d) None of the above
(e) I am not attempting the question

Q19
As per Chapter X of the SEBI (DIP) Guidelines 2000 stating the Guidelines for issue of debt instruments, where the company desires to rollover the debentures issued by it, it shall file ____________, a copy of the notice of the resolution, to be sent to the debenture-holders for the purpose, through merchant banker, prior to dispatching the same to the debenture-holders.
[ 1 Mark ]

(a) with SEBI
(b) with Registrar of Companies
(c) with Debenture Trustees
(d) None of the above
(e) I am not attempting the question

Q20
As per Chapter X of the SEBI (DIP) Guidelines 2000 specifying the guidelines for issue of capital by Designated Financial Institutions (DFIs), if a DFI fails to meet the criteria of maintenance of Debt - Equity ratio (DER) and Notional Debt Service Coverage Ratio (NDSCR), no dividend shall be declared by such DFI for the relevant year except with the approval of the trustees and the rate of dividend shall not exceed ____________.
[ 2 Marks ]

(a) 15%
(b) 20%
(c) 5%
(d) 10%
(e) I am not attempting the question

Q21
Notice of meeting of annual General Meeting need not be issued to the auditor of the company.
[ 2 Marks ]

(a) TRUE
(b) FALSE
(c) I am not attempting the question

Q22
As per the Guidelines for Preferential Issues in the SEBI (DIP) Guidelines 2000, the details of unutilised monies shall be disclosed out of the preferential issue proceeds _____________.
[ 2 Marks ]

(a) under the head sources of funds
(b) need not be disclosed
(c) under separate head in the balance sheet
(d) as per Schedule VI of the Companies Act 1956
(e) I am not attempting the question

Q23
As per the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, SEBI shall forward the application of exemption to the Takeover Panel within __________. [ 1 Mark ]

(a) 15 days of the receipt of the application
(b) 10 days of the receipt of the application
(c) 5 days of the receipt of the application
(d) 20 days of the receipt of the application
(e) I am not attempting the question

Q24
The resolution to be passed, in terms of section 81(1A) with respect to pricing of shares arising out of warrants etc., as per the Guidelines for referential Issues in the SEBI (DIP) Guidelines 2000, is required to clearly specify __________. [ 1 Mark ]

(a) the specified date
(b) the date of the resolution
(c) the relevant date
(d) the date on which the holder of warrants is entitled to apply for the shares
(e) I am not attempting the question

Q25
What are the functions to be performed by the chairman of the Audit Committee to comply with the provisions of the listing agreement? [ 2 Marks ]

(a) To be present at the Board meeting where the minutes of the Audit committee are placed for
approval.
(b) To be an independent director and to be present at the Annual General meeting.
(c) To carry out audit of auditors.
(d) I am not attempting the question

Q26
The information about the transfer of securities in the name of the beneficial owners has to be furnished ______________.
[ 1 Mark ]

(a) by the depository to the beneficial owner
(b) by the depository to the issuer
(c) by the beneficial owner to the depository
(d) by the issuer to the depository
(e) I am not attempting the question

Q27
From the below mentioned persons, who can become independent director of Tamarind Ltd?
[ 2 Marks ]

(a) Mr. Lakshman, as he holds 1.5% of the equity shares of the company having voting rights.
(b) Mr. Ghanshyam, as he is supplier of the company's major raw material.
(c) Mr. Shyam, as he is an executive of the company for last 5 financial years.
(d) Mr. Ram, as he is Executive Director of Tamarind Ltd.'s subsidiary.
(e) I am not attempting the question

Q28
A listed company is required to send statement to the Stock Exchange explaining the reasons to the Stock Exchange along with the Review Report in the following case: [ 2 Marks ]

(a) No statement is required to be send.
(b) If there has been delay in sending the Review Report.
(c) If the Review Report has certain qualifications or adverse remarks by the Auditors.
(d) If any item in the quarterly unaudited results varies by 20% or more from the respective
half yearly results.
(e) I am not attempting the question

Q29
As per the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 with respect to bailout takeovers, the company being taken over shall be appraised taking into account the _________. [ 2 Marks ]

(a) Financial viability
(b) Technical viability
(c) None of the above
(d) I am not attempting the question

Q30
State which of the following is false? As per the SEBI (DIP) Guidelines 2000, for raising of funds through public issues, the lead merchant banker shall ensure that the following are complied with in the research reports ___________. [ 2 Marks ]

(a) risk factors are not reproduced
(b) research report is based on the published information contained in the offer document
(c) advertisement code is observed
(d) None of the above
(e) I am not attempting the question

Q31
State which of the following is True? The Compensation Committee with respect to ESOS shall frame suitable policies and systems to ensure that there is no violation of __________. [ 1 Mark ]

(a) SEBI (Issue of Sweat Equity) Regulations 2002
(b) SEBI (Merchant Bankers) Regulations 1992
(c) SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997
(d) SEBI (Prohibition of Insider Trading) Regulations 1992
(e) I am not attempting the question

Q32
As per the Guidelines on Initial Public Offers through the Stock Exchange on-line system in the SEBI (DIP) Guidelines 2000, the Registrar to the Issue having electronic connectivity with the Stock Exchange through which the securities are offered under the system shall be appointed by _____________. [ 2 Marks ]

(a) The Lead Manager
(b) The Stock Exchange
(c) The Merchant Banker
(d) The Company
(e) I am not attempting the question

Q33
Which of the following term is defined under the Depository Act 1996? [ 1 Mark ]

(a) Record
(b) Certificate
(c) Scheme
(d) Contract
(e) I am not attempting the question

Q34
As per the Guidelines for Preferential Issues in the SEBI (DIP) Guidelines 2000 in case of allotment of shares and securities convertible into equity shares at later date on preferential basis pursuant to scheme of corporate debt restructuring as per the Corporate Debt Restructuring framework specified by the Reserve Bank of India such preferential issues shall be made fully paid up _________.
[ 2 Marks ]

(a) at the date of the resolution
(b) at the time of their allotment
(c) at the time of their issue
(d) the guidelines do not apply
(e) I am not attempting the question

Q35
As per the Guidelines for Preferential Issues in the SEBI (DIP) Guidelines 2000 the details of all monies utilised out of the preferential issue proceeds shall be disclosed ________. [ 2 Marks ]

(a) under an appropriate head in the balance sheet of the company
(b) under the head application of funds
(c) need not be disclosed
(d) as per Schedule VI of the Companies Act 1956
(e) I am not attempting the question

Q36
In case of public company member can appoint only one proxy. [ 2 Marks ]

(a) FALSE
(b) TRUE
(c) I am not attempting the question

Q37
As per the SEBI (ESOS and ESPS) Guidelines 1999, the expected life of ESOSs should not be less than _______________. [ 2 Marks ]

(a) quarter of the exercise period of the ESOSs issued
(b) three-quarters of the exercise period of the ESOSs issued
(c) one and half of the exercise period of the ESOSs issued
(d) half of the exercise period of the ESOSs issued
(e) I am not attempting the question

Q38
Securities Appellate Tribunal SAT means ___________. [ 2 Marks ]

(a) SAT established under Section 23 of the Securities Contracts (Regulation) Act 1956
(b) SAT established under Section 15K of the SEBI Act 1992
(c) SAT established under Section 22 of the Securities Contracts (Regulation) Act 1956
(d) SAT established under Section 15K of the Securities Contracts (Regulation) Act 1956
(e) I am not attempting the question

Q39
As per Chapter X of the SEBI (DIP) Guidelines 2000 stating the Guidelines for issue of debt instruments, redemption of debentures shall be made by the issuer company ___________.
[ 1 Mark ]

(a) as per the decision of the Debenture Trustee
(b) as per the offer document
(c) as per the debenture trust deed
(d) as per the decision of the issuer company
(e) I am not attempting the question

Q40
One of the powers of the SAT is __________. (Strike off the odd one) [ 2 Marks ]

(a) delist the securities of any company from the Recognised Stock Exchange
(b) review its decisions
(c) receive evidence on affidavits
(d) issuing Commissions for the examination of witnesses or documents
(e) I am not attempting the question

Q41
As per Chapter X of the SEBI (DIP) Guidelines 2000 specifying the guidelines for issue of capital by Designated Financial Institutions (DFIs), the name of the trustee / agent shall be stated in the offer document and the trust deed or any other documents for the purpose shall be executed ____________. [ 2 Marks ]

(a) within two months of the closure of the issue
(b) within four months of the closure of the issue
(c) within three months of the closure of the issue
(d) within six months of the closure of the issue
(e) I am not attempting the question

Q42
As per Chapter X of the SEBI (DIP) Guidelines 2000 specifying the guidelines for issue of capital by Designated Financial Institutions (DFIs), the maximum target amount specified in the prospectus shall not exceed __________. [ 2 Marks ]

(a) four times the minimum target amount
(b) thrice the minimum target amount
(c) twice the minimum target amount
(d) five times the minimum target amount
(e) I am not attempting the question

Q43
State which of the following is false? As per the Chapter XI of the SEBI (DIP) Guidelines 2000 specifying the Guidelines for Book Building, the advertisement shall contain the following: [ 1 Mark ]

(a) The names and addresses of the syndicate members as well as the bidding terminals for
accepting the bids.
(b) The method and process of bidding.
(c) The net offer to the public.
(d) The date of opening and closing of the bidding.
(e) I am not attempting the question

Q44
The concerned Recognised Stock Exchange shall lose its recognition if ________. (Select the odd one) [ 1 Mark ]

(a) the scheme of corporatisation and demutualisation has been rejected
(b) it fails to submit the scheme of corporatisation or demutualization
(c) SEBI so publishes order in the Official Gazette
(d) it has not been corporatised or demutualised
(e) I am not attempting the question

Q45
As per the SEBI (DIP) Guidelines 2000, for raising of funds through public issues, ensuring that the basis of allotment is finalized in fair and proper manner is the responsibility of the ____________. [ 2 Marks ]

(a) Managing Director of the Designated Stock Exchange
(b) Bankers to the issue
(c) SEBI
(d) Brokers to the issue
(e) I am not attempting the question

Q46
As per Clause 42 of the listing agreement, state whether any condition precedent is required to be complied by a listed company for issue of new securities? [ 2 Marks ]

(a) Yes, to deposit with the Stock Exchange the prescribed amount, before opening the
subscription list.
(b) None
(c) Yes, to promptly notify the Stock Exchange.
(d) I am not attempting the question

Q47
The Court shall take cognizance of the offence punishable under the Depository Act 1996 on complaint made by ___________. [ 1 Mark ]

(a) Central Government
(b) SEBI
(c) State Government
(d) Any of the above
(e) I am not attempting the question

Q48
As per the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, no acquirer shall acquire shares or voting rights, through market purchases and preferential allotment pursuant to a resolution passed under section 81 of the Companies Act, 1956 or any other applicable law, which (taken together with shares or voting rights, if any, held by him or by persons acting in concert with him), entitle such acquirer to exercise more than ___________. [ 1 Mark ]

(a) fifty five per cent of the voting rights in the company
(b) fifty four per cent of the voting rights in the company
(c) seventy four per cent of the voting rights in the company
(d) fourteen per cent of the voting rights in the company
(e) I am not attempting the question

Q49
State which of the following is true? As per the Chapter XI of the SEBI (DIP) Guidelines 2000 specifying the Guidelines for Book Building, _________. [ 1 Mark ]

(a) the book runner is required to enter into an underwriting agreement with the issuer company
(b) the book runner is required to enter into an underwriting agreement with SEBI
(c) the book runner is required to enter into an underwriting agreement with Stock Exchange
(d) None of the above
(e) I am not attempting the question

Q50
As per the listing agreement, the Chairman of which Committees should be present at the Annual General meetings of the company? [ 2 Marks ]

(a) Remuneration Committee
(b) Audit Committee and Remuneration Committee
(c) Shareholders Grievance Committee
(d) Only Audit Committee
(e) I am not attempting the question

Q51
Every recognised stock exchange shall furnish copy of Annual Report to ______. [ 1 Mark ]

(a) SEBI and Central Government
(b) SEBI
(c) Central Government
(d) State Government
(e) I am not attempting the question

Q52
Recognised Stock Exchange may make rules or amend rules to provide for the following matters: (Select the odd one) [ 2 Marks ]

(a) Restriction of voting rights to members only in respect of the matter placed before the
Stock Exchange at any meeting
(b) Regulation of voting rights in respect of any matter placed before the stock exchange at any
meeting
(c) Restriction on the right of member to appoint another person as his proxy to attend and vote
at meeting of the stock exchange
(d) None of the above
(e) I am not attempting the question

Q53
Who has been authorised under the Depository Act 1996 to make Rules? [ 2 Marks ]

(a) Securities Appellate Tribunal
(b) Central Government
(c) SEBI
(d) Depositories
(e) I am not attempting the question

Q54
As per the Guidelines for Preferential Issues in the SEBI (DIP) Guidelines 2000 locked in shares/instruments may be transferred __________. [ 2 Marks ]

(a) subject to continuation of lock-in, in the hands of transferee(s) for the remaining period
(b) subject to continuation of lock-in in the hands of transferee(s) for one year
(c) subject to continuation of lock-in in the hands of transferee(s) for four years
(d) subject to continuation of lock-in in the hands of transferee(s) for three years
(e) I am not attempting the question

Q55
State which of the following is false? As per the SEBI (DIP) Guidelines 2000, for raising of funds through public issues, any unsubscribed portion in any reserved category ___________.
[ 2 Marks ]

(a) may not be added back to any other reserved category
(b) may be added back to the net offer to the public
(c) may be added back to any other reserved category
(d) None of the above
(e) I am not attempting the question

Q56
As per the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, any person aggrieved by an order of SEBI may prefer an appeal to ______. [ 2 Marks ]

(a) Securities Appellate Tribunal
(b) High Court
(c) Supreme Court
(d) None of the above
(e) I am not attempting the question

Q57
For implementation of ESOS and ESPS as per the SEBI (ESOS and ESPS) Guidelines 1999, till the stage of framing the ESOS/ESPS and obtaining the in-principal approval from the stock exchange the company shall appoint a ______________. [ 2 Marks ]

(a) registered banker
(b) registered merchant banker
(c) registered stock broker
(d) registered portfolio manager
(e) I am not attempting the question

Q58
State which of the following is false? As per the SEBI (DIP) Guidelines 2000, for raising of funds through public issues 'Qualified Institutional Buyer' shall mean ____________. [ 1 Mark ]

(a) provident funds with minimum corpus of Rs. 15 crores
(b) scheduled commercial banks
(c) mutual funds
(d) public financial institution as defined in section 4 of the Companies Act 1956
(e) I am not attempting the question

Q59
Alongwith the quarterly unaudited financial results the company is required to publish segment wise revenue results and capital employed. In case of segment operations which are primarily of financial nature in such segment results indicate ____________. [ 2 Marks ]

(a) profit/loss after tax and after interest and the interest shall not include the interest pertaining
to such segment
(b) profit/loss before tax and after interest and the interest shall not include the interest
pertaining to such segment
(c) profit/loss before tax and interest and the interest shall not include the interest pertaining to
such segment
(d) I am not attempting the question

Q60
As per the SEBI (DIP) Guidelines 2000, for raising of funds through public issues the outstanding underwriting commitments of merchant banker shall not exceed ___________. [ 1 Mark ]

(a) 30 times its net worth at any point of time
(b) 25 times its net worth at any point of time
(c) 20 times its net worth at any point of time
(d) 10 times its net worth at any point of time
(e) I am not attempting the question