CS Professional June 2025 Question Paper Strategic Management and Corporate Finance

FOR CS PROFESSIONAL EXAM PREPARATION

CS Professional 2025
Question Paper ·
Strategic Management
and Corporate Finance
EXAM YEAR TYPE

CS Professional 2025 Question Paper
SUBJECT DATE

Strategic Management and Corporate Finance June 2025

Notes · Sample Papers · Previous Year Papers · Mock Tests

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NEW SYLLABUS
535
Roll No. ..................................... : 1 :

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Time allowed : 3 hours Maximum marks : 100

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Total number of questions : 6 Total number of printed pages : 16
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a Answer

PART–I

1. Case Study :

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(a) UKD Steel’s Vision strikes a balance between economic value as well as ecological

m UKD Steel's CSR interventions have been
and societal value by aspiring to be ‘‘A Global Benchmark in Value Creation and

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Corporate Citizenship". Since its inception,

ag where the community was given support for its overall
more of a ‘provider’ to society,
needs, both for sustenance and development. Gradually, the shift in approach led to
UKD Steel being an ‘enabler’ focusing on building community capacity through training
programs. The Company supports and propagates the principles of the United Nations
Global Compact as a Founder Member. It acts as a signatory to the World Steel

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. from the concept
Sustainability Charter and supports the Affirmative Action program of the Confederation

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e The responsibility
of Indian Industry. UKD Steel’s approach to business has evolved

s em that the wealth created must be continuously returned toasociety.
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of combining the three elements of society—social, environmental, and economic—
is of utmost importance to the way of life at UKD Steel. Today UKD Steel's CSR
activities in India encompass the Company’s Steel Works, Iron ore mines, and collieries,
reaching out to the cities of Jharkhand, Odisha, and West Bengal.

1/2025/SMCF/NS P.T.O.

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UKD Steel’s CSR Initiatives :

Community involvement is a characteristic of all UKD Group companies around the
world. It can take the form of financial support, provision of materials, and the involvement
of time, skills, and enthusiasm of employees. The Group contributes to a very wide
range of social, cultural, educational, sporting, charitable, and emergency assistance
programs. The Group works in partnership with the Government, national and international
development organizations, local NGOs, and the community to ensure sustainable
development. The Corporate Social Responsibility Division of UKD Steel delivers these
responsibilities through several institutionalized bodies :

UKD Steel Rural Development Society (URDS)

UKD Steel Rural Cultural Society (URCS)

UKD Steel Family Welfare Foundation (UFWF)

UKD Steel Skill Enhancement Federation (USEF)

Recent Developments :

In its recently concluded Board meeting, the directors of UKD Steel have approved
the appointment of Mr. Kumar as a Consultant to the Board. Mr. Kumar has a
rich experience in the field of Corporate Governance and CSR. Further, Mr. Nimeet
has been appointed by UKD Steel to act as the Company Secretary. His appointment
comes against the backdrop of the recent concerns pointed out by the Independent
Director Mr. Shobhit about the Corporate Governance practices within UKD Steel.
The Board of UKD Steel wishes to seek professional guidance and leverage the
expertise of Mr. Kumar in the areas of CSR and Corporate Governance.

1/2025/SMCF/NS Contd. ........

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A special board meeting was scheduled on 25th May 2025 where Mr. Kumar was

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invited to brief the board on certain matters. The agenda for the meeting was as

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under :
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l (A) To discuss about Mr. Kumar's report to the Board on the factors influencing
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the CSR activities undertaken by UKD Steel.

(B) To receive a briefing from Mr. Kumar on the interface between CSR and

Corporate Governance.

(C)
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To discuss the steps to be undertaken in the implementation of a robust corporate
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. UKD Steel.
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governance framework within
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Required :
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(i) As a newly qualified company secretary, assist Mr. Kumar in compiling a report

giving an account of the factors that shall influence the CSR activities undertaken

by UKD Steel.

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(ii) List out the important matters related to CSR where the Board of Directors

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of the Company takes decision.

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s em Assuming yourself as Mr. Nimeet, kindly list downathe points, which according
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(iii)

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a to you, define the role of a Company Secretary in the implementation of a

robust Corporate Governance framework.

(5+2+3=10 marks)

1/2025/SMCF/NS P.T.O.

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(b) Manmeet Motor Company (MMC) was started in 1984 to manufacture and sell

motorcars across India and the globe. Manmeet Motor Company’s Total Quality

Management (TQM) practices started in 1986. Mr. Arvind Singh, the founder of MMC

had given the slogan "Quality is our Top Priority" which laid the foundation for

implementation of TQM within MMC. Mr. Avadesh Singh took over as the new

Managing Director of MMC in 2024.

Total Quality Management at MMC :

Quality has been a pioneering element in the success of MMC since its foundation.

During the initial years, MMC's business was impacted by global tariffs on automobile

spare parts which led to an increase in the cost of production for MMC and a

subsequent decline in its margins. To combat this situation, Mr. Arvind initiated the

TQM movement across MMC. The results of this movement were stunning at MMC.

After racking up ` 3 crore in losses from 1984 to 1986, MMC started trial runs

to manufacture the spare parts in-house to reduce the cost of production. By 1989,

on completion of three years after the implementation of TQM principles in its value

chain, MMC had turned into the most profitable company in the automobile segment

with margin percentages beating the industry standards considerably.

Current Developments at MMC :

A series of setbacks are tarnishing MMC's hard-won reputation for quality. There

has been a media controversy over substantial environmental degradation due to the

1/2025/SMCF/NS Contd. ........

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in-house production of spare parts. Further, the recent customer survey also revealed

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that the customer satisfaction index proved to be below industry standards, which

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was detrimental to MMC's reputation. In light of these developments, Mr. Avadesh
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a in mature enterprises. He was impressed by the ideology and felt its relevance for
attended a symposium at NYU Stern on the success of Six Sigma implementation

MMC. On his return to India, he asked Ms. Nivedita, his Executive Assistant to

schedule a roundtable of all the Senior Executives of MMC to deliberate on the

Six Sigma implementation in MMC. Ms. Nivedita is a recently qualified management

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graduate from the Indian Institute of Management Bangalore and has joined as an

Executive Assistant to Mr. Avadesh .at MMC. Considering her recent academic stint,
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Mr. Avadesh has specifically

Required :

(i) Assuming yourself as Mr. Avadesh, explain the principles of TQM to the senior

executives that led to the success of TQM at MMC.

(ii)
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Assuming yourself as Mr. Rolston, a Senior Vice President and a member

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of the roundtable, state the reasons that necessitate the adoption

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at MMC.

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a (iii) Assuming yourself as Ms. Nivedita, brief the members of the roundtable on

the steps involved in the implementation of Six Sigma using the DMAIC approach.

(5+3+2=10 marks)

1/2025/SMCF/NS P.T.O.

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Attempt all parts of either Q. No. 2 or Q. No. 2A

2. (a) The concept of Strategic planning gained prominence in strategic management in corporate

sector and it has maintained its importance in contemporary times too. It follows a

cycle known as the strategic planning cycle.

Explain the steps followed in the strategic planning cycle and how strategic planning

can help your organization ?

(5 marks)

(b) The term business environment is defined by several business experts and economists.

What is the definition given by Keith Davis in this context ?

How can the demographic environment influence business growth ?

(5 marks)

(c) Vision leads to mission and mission leads to objectives (which are designed to achieve

the mission), objectives lead to goals (which are designed to achieve the objectives)

and goals lead to targets (which are set to achieve the goals). How will you compare

the Vision and Mission statements of a business unit ?

(5 marks)

(d) BCG analysis is mainly used for Multi-Category/Multi Product companies. All categories

and products together are said to be the part of Business Portfolio. It aims to evaluate

1/2025/SMCF/NS Contd. ........

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each product, i,e., the goods and services of the business in two dimensions and

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the combination of both dimensions creates a matrix into which the products from

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the portfolio are placed below :

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Name the two dimensions and explain the terms ‘‘STAR, QUESTION MARK, CASH
COW and DOG’’.

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OR (Alternative e m to Q. No. 2)
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2A. (i) Blockchain technology is an advanced database mechanism that allows transparent
information sharing within a business network. A blockchain database stores data in
blocks that are linked together in a chain. Name the three pillars of Blockchain Technology
and also list out any seven new business applications that block chain gives to internet
users.
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(ii) Prax Ltd. wants to expand its supply chain operations to Europe and USA where

ag company has its strong customer base and need to form a logistics strategy for ease
of operations. Advise the company on the elements to be included in its effective
logistics strategy plan.

(5 marks)
1/2025/SMCF/NS P.T.O.

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(iii) ‘‘Financial Technology (Fintech) has emerged in the 21st Century as a new tech that

seeks to improve and automate the delivery and use of financial services’’. Name

the four broad categories of users for fintech. What are the most active areas of

fintech innovation ?

(2+3=5 marks)

(iv) Michael Porter’s five forces model is an analysis tool that uses five industry forces

to determine the intensity of competition in an industry and its profitability level which

has turned into one of the most popular and highly regarded business strategy tools.

Among those tools, strategies to face the threat of new entrants is very important.

Explain the situations where the threat of new entrants is very high.

(5 marks)

PART–II

3. (a) Casino Ltd. is a newly incorporated manufacturing company in Gujarat desiring to

procure raw materials (RM) from within the country and some machine tools from

Japan. They have entered into an agreement with a leading public sector bank for

letter of credit for the said purpose. Up to 80% of the purchases will be under

LC of which 30% shall be used for imports and balance for inland purchases.

On the basis of the information provided, calculate the limit of LC for the financial

year 2025-26 :

1/2025/SMCF/NS Contd. ........

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Sl. No. Particulars Amount `

omRM to be procured during the year . co
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1 400 crore

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1 month

ag Lead time for imports 2 months

3 Goods will be in transit

– for domestic purchases 1 month

– for imports 2 months

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4 Credit available from

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agsuppliers
– Indian suppliers 1 month

– Japanese 3 months

(5 marks)

(b) Casino Ltd. in another incidence has given the loan details extracted from its Balance

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Sheet as on 31st March ,2025 and other available information.

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Calculate the fund based and non-fund-based facilities availed from
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institutions :

ag Sl. No. Loan facilities ` In crore

1 Bank Guarantee (against 75% cash margin) 2

2 Cash Credit (against hypothecation of book debts) 4
1/2025/SMCF/NS P.T.O.

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3 Vehicle loan (availed from Reliant Finance Ltd. an

NBFC) 0.50

4 Housing Loan (availed from TALA Housing

Finance Ltd. – house mortgaged) 2

5 Key Loan Cash Credit (godown jointly opened

by Bank & company) 5

6 Performance bank guarantee (for contracts executed).

Period expired & bank reversed the entry in its 5.50

books

7 Standby letter of credit 2.50

8 Pre-shipment packing credit 3

9 Supplier’s credit 4

10 Bank Guarantee invoked by the beneficiary 2

11 Bill discounting facility with a limit of ` 2

crore. At present Bill discounted for ` 50

lakhs yet to be realised and Rs. 25 lakhs

worth bills were sent for collection

12 The company is in discussion with a group

of consortium banks for a project loan 10

(documents yet to execute) (3 crore Bank

Guarantee & 7 crore term loan.)

(5 marks)

1/2025/SMCF/NS Contd. ........

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(c) In Board Meeting of Casino Ltd., it was decided to raise ` 10 crore by issuing

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200000 shares through a book building process. As the Company Secretary advise

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the Board on the following :

a s a criteria
l (a) What would be the allocation pattern if the company fulfils the eligibility g
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regarding net tangible assets, average operating profit, net worth etc. ?

(b) Will there be any change in allocation, if the company does not fulfil the above-

mentioned criteria ?

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(3+2=5 marks)

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mdirect investment of money from individual and
4. (a) An Infrastructure Investment Trust (InvITs) is a Collective Investment Scheme similar

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to a mutual fund, which enables
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institutional investors inainfrastructure projects to earn a small portion of the income

as return.

Is it mandatory to list InvITs as per SEBI (Regulations) ? What are the situations

when delisting of InvIT units are permitted ?

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Renaissance Ventures Ltd announced issue of bonus shares in the ratio of 1 : 4

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(1 share for every 4 shares held). At present the shares have a market value of

` 1000 per share. Besides the bonus issue, company also announced to split the

shares by reducing the face value from ` 10 to ` 2.

1/2025/SMCF/NS P.T.O.

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Calculate the value per share if :

(i) Bonus shares were issued before splitting the shares.

(ii) Bonus shares were issued after splitting the shares.

Determine the difference between above scenarios and comment on price.

(2+2+1=5 marks)

(c) What is Special Purpose Acquisition Company (SPAC). What are the eligibility criteria

for listing of SPAC ?

(5 marks)

5. (a) The annual sales of ABC Ltd. are ` 60 lakhs of which 20% is on cash and balance

on credit. Debtors are allowed one month to clear off the dues. A factor is willing

to advance 90% of the book debts for a fee of 1% per month plus a commission

of 4% on total debtors (besides the interest charged). If this arrangement is made,

the company is able to make a gain of ` 21,600 annually in debt management costs

and bad debts of 1%. Factor charges interest on the loans. Bank offers working

capital finance against book debts with 10% margin at 12% interest per annum and

a processing fee of 2% on total debts.

As the CFO of the company, advise the company on the best option.

(5 marks)
1/2025/SMCF/NS Contd. ........

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(b) Globalisation has opened doors and opportunities that were never explored before.

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International Financing is also known as International Macroeconomics as it deals with

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finance on a global level.
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l In the light of above statements, explain the importance of External Commercial aBorrowing
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(ECB). Which are the areas where the ECB proceeds can be parked ?

(2+3=5 marks)

(c) Intermediaries are an integral part of securities market. They are the facilitators ensuring

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.for these intermediaries. These Regulations allow
seamless functioning of securities market. SEBI regulates various intermediaries in the

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primary markets through Regulations

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l of these intermediaries and to ensure that their conduct
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SEBI to inspect the functioning

is market appropriate and fair.

Based on the above statements answer the following questions :

(i) Whether insurance agent or insurance broker is exempted from obtaining

o
registration under SEBI (Investment Advisers) Regulations 2013.
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Whether a person acting in multiple capacities such as insurance

s em advisor, mutual fund distributor, etc. is exemptedlafrom obtaining registration
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a under IA Regulations ?

(iii) How does an Investment Advisor redress grievance of the investor clients ?

(2+2+1=5 marks)
1/2025/SMCF/NS P.T.O.

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: 14 :

Attempt all parts of either Q. No. 6 or Q. No. 6A

6. (a) A company came out with an issue of 1000 shares at a price band of
` 300 to ` 360. The minimum lot size is 50. The company received the following bids :

Bid Number of Shares Bid Price per share (`)

1 250 360

2 250 355

3 100 350

4 450 360

5 150 330

6 250 320

7 150 300

From the above :

(i) Decide how the allotment shall be made to each applicant under Book Building
process, if the final issue price is ` 300.

(ii) What is the amount to be charged from the applicant of Bid l and Bid 3 ?

(3+2=5 marks)

(b) Sun Ltd. offers new shares of ` 100 each at 25% premium to existing shareholders
on one for four basis. The cum-right market price of a share is ` 150.

Calculate :

– Value of a right

– Ex-right market price of a share

Interpret the results.

(2+2+1=5 marks)

1/2025/SMCF/NS Contd. ........

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(c) XYZ Ltd. wants to make a public issue of 10,00,000 equity shares of ` 100 each

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at par. The applications are received for 15,00,000 shares. The company wants to

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explore the Green Shoe Option (GSO). IPO Price, i.e. listing price is ` 120.
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What is the maximum number of shares which can be issued through Green

Shoe Option ?

(ii) If the market price post listing comes down to ` 90, what the stabilizing

agent can do in this situation ?

(iii) If the market price post listing goes up to ` 110, what is the option before

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the stabilizing agent ?

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OR (Alternative question to Q. No. 6)

6A. (i) Define briefly the following in context of Indian Equity Private Funding :

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(a) Hedge Fund

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(c) Corpus

ag (d) Start up

(e) Venture Capital Undertaking.

(1×5=5 marks)

1/2025/SMCF/NS P.T.O.

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(ii) What is placement memorandum ? Discuss briefly the contents of placement
memorandum.

(5 marks)

(iii) SEBI vide notification dated 16th October, 2024 introduced Liquidity Window Facility
for investors in debt securities through Stock Exchange Mechanism. Explain Liquidity
Adjustment Facility. What are the features and conditions governing the same ?

(5 marks)

————— o —————

1/2025/SMCF/NS Contd. ........

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